Copyright 2015 All rights reserved. This material can't be published, transferred, copied or redistributed.
The bank's board also clawed back another $75 million in pay from two former executives, CEO John Stumpf and community bank executive Carrie Tolstedt, saying both executives dragged their feet for years regarding problems at the second-largest USA bank.
Wells Fargo & Co.'s board of directors has placed officially the bulk of the blame for its customer fraud account scandal on its former head of its community banking division and its retired top executive.
In a statement, Tolstedt lawyers said they disagreed with the board's conclusions that she was heavily responsible for the sales culture problems at Wells.
Wells Fargo has clawed back a further $75m (£60.3m) from two former executives in the wake of a fake accounts scandal. "Sloan said that the bank created a special human resources team to help "innocent" employees come back to work". Wells Fargo said its internal investigation goes back to 2009.
The report paints the bank's board, meanwhile, as being out of the loop on the scope of the sales problems. As ThinkProgress' Alan Pyke wrote, these poorly compensated employees faced a bad choice: "do the job correctly and get fired, or lie and maintain a steady income".
But it didn't stop there. Daily and monthly "Motivator" reports were issued, pitting individuals, branches and regions against one another in terms of sales goals; these were discontinued in 2014 after regional executives complained at a "leadership summit" meeting that the reports perpetuated a "culture of shaming and sales pressure".
At some point Wells Fargo realized there could be a problem and began to take steps to address it. It is not good for the chairman and some board members, past and present.
Initially created to motivate branch employees to exceed sales goals, the pressure to beat higher daily sales targets instead encouraged them to forge customer signatures, hold off on opening accounts signed for in December and target friends and family to make up the numbers.
However, the board's concluded that Sloan had little direct involvement in the questionable sales practices. The law firm conducted 100 interviews of current and former employees and other parties and searched more than 35 million documents. It found that 3,170 employees left Wells Fargo because of "dissatisfaction with supervisors".
The report criticized Tolstedt and other senior executives for failing to pay sufficient attention "to the substantial risk to Wells Fargo's brand and reputation" from improper and unethical sales practices and for "the potential for financial and other harm to customers".
Tim Sloan, who replaced Stumpf as chief executive, escaped without much critique in the report.
Incredibly, the judges who oversaw those cases were so appalled by what they saw that even they "made disparaging comments" about Wells Fargo's incentive system, according to the report. "Community Bank leadership resisted and impeded outside scrutiny or oversight and, when forced to report, minimized the scale and nature of the problem".
Instead, the Risk Committee heard that only 230 employees had been fired and that "the root cause was intentional employee misconduct, not systemic issues", according to the report.
Wells Fargo's findings are an ignominious career finale for Tolstedt, who was a fixture on Fortune's annual Most Powerful Women list, ranked at No. 27 as recently as 2015, recognized as the most powerful female banker in the U.S.at the time.
"The 110-page board report, which followed a six-month probe by directors assisted by independent counsel Shearman & Sterling, reserved its fiercest criticism for former managers at Wells' community banking division, including then-chief Carrie Tolstedt". The Board of Directors has elected Catherine A. Suever, now Vice President and Controller and acting Chief Financial Officer, to succeed Mr. Marten as Executive Vice President - Finance and Administration and Chief Financial Officer, effective immediately.