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The true story of the Fake Zombies, probably the strangest, most complicated con in Rock History!Between the Liner NotesGoogle Play Music is no longer availableGoogle Play Music is no longer available All the best Google Play Music features live on in YouTube Music. Come play, share, discover, and build a new library of music you love.https://play.google.com/music/listen?u=0#/ps/I4scnlrs22njecrezpeh75il2kmIn 1969, the Zombies had a huge hit single, despite having broken up two years earlier. To meet the unexpected demand, one promoter did the only sensible thing: Hire four kids from Texas to tour America pretending to be a defunct British psych-rock band.Chris White shakes his head and laughs when he looks at the first photo. At 73, the bassist and songwriter for the reunited British psych-rock band the Zombies looks like a cool grandpa in black pants, blue dress shirt, and polar fleece vest — a sharp contrast from his septuagenarian bandmates who still sport leather jackets and tight pants. He adjusts his glasses and studies the image of four flamboyantly dressed young men taken in 1969. Backstage at the Saban Theatre in Beverly Hills last October and after this brief intermission, White will join the rest of the band onstage to play the band’s cult classic 1967 album Odessey and Oracle in its entirety.The Original "Zombies," from left: Seab Meador, Dusty Hill, Frank Beard, Mark RamseyI pull up another grainy photo from 1969 on my laptop: a traditional black and white press photo for the Original "Zombies" (in conspicuous scare quotes), autographed. There are only four guys pictured despite the fact that the Zombies were a five-piece. I inform White that the two young men wearing cowboy hats are Dusty Hill and Frank Beard from the legendary Texas blues-rock band ZZ Top, although the names D. Cruz and Chris Page are scrawled over them. The real Zombies would have never worn cowboy hats.The Zombies quietly disbanded when Odessey and Oracle failed to make the charts. Nobody even saw fit to correct the unintentionally misspelled “Odessey” on the record’s cover, viewed in hindsight as typical psychedelic-era wordplay. Almost two years after their breakup, after little fanfare and two failed singles, the band’s U.S. label, Date Records, decided to release the track “Time of the Season” as a last-ditch effort; the song went to No. 3 on the Billboard chart and the Zombies were suddenly in demand.The Zombies' Odessey and Oracle album.The Zombies, unaware of their stateside success — this was possible in 1969 — had already moved on to new musical projects or day jobs. This vacuum meant anyone could tour the United States pretending to be the Zombies, even a four-piece blues band from Dallas. As the Beatles and Stones went from garage and blues rock beginnings to more adventurous music, the Zombies took their early, more raucous hits (“She’s Not There,” “Tell Her No”) and refined them. But replicating a refined sound was hardly the priority.There were in fact two different bands touring the United States in 1969 calling themselves the Zombies. Both impostor groups were managed by the same company, Delta Promotions, the owners of which insisted they’d legally acquired the songs of the Zombies and other bands. It was an operation that would be impossible to attempt today, perpetrated in an era when fans didn’t have unlimited access to artists' whereabouts, or, in some cases, even know what they looked like.In the history of the American popular music, artists have often been seen as interchangeable by the industry that promotes and distributes them. In the doo-wop era, if a member of a popular group pushed back against a manager or label boss, they were simply sent packing, with a new, more compliant candidate brought in to replace them. Over the course of their existence, the Drifters have had somewhere around 60 members.It was in this climate that Delta Promotions took this exploitation to a new extreme, figuring out a way to tour and sell “the Zombies” and other bands without those bands or their fans even realizing. As the British Invasion spurred rock's cultural explosion in the '60s, there simply weren't yet enough of these upstart bands touring North America to meet the demand. So, they made some up.Nearly 50 years later, what happened with the Zombies is now more myth than scandal, hazy details further lost to history, with many of its principal players gone or forgotten. But, in terms of sheer audacity and brazenness, it’s a story that’s still hard to top.Before he joined Hill and Beard in the Texas band that passed itself off as the Zombies, Mark Ramsey was 18 years old and living on the outskirts of Dallas. He was good-looking, he had a sweet girlfriend named Vicki, and he loved playing guitar. During his senior year of high school, a Texas blues band called the Gentlemen came to play a school-sponsored rock concert, featuring neighborhood hotshot guitarist — and future fellow fake Zombie — Sebastian “Seab” Meador. The Gentlemen had scored a minor hit with their single "It’s a Cry’n Shame" in 1966 when Meador was only 16, and Ramsey couldn’t pass up the opportunity to introduce himself.Ramsey remembers meeting Frank Beard later at a spot in Fort Worth called Pizza Inn, where they became fast friends. Beard knew everyone in the Dallas music scene and was noted for playing a drum kit with two bass drums, the mark of a badass drummer in 1969. Beard was already friends with Dusty Hill, and he took Ramsey to see Hill’s band American Blues.It wasn’t long after that that Ramsey got the call to join the fake Zombies, which at the time featured Beard, Hill, and Meador. He isn’t exactly sure how the offer came about, and is unsurprisingly fuzzy about some of the details of the era. “The ‘60s were consumed with the fascination of experimentation,” he says now, wryly. “Frank was the one who approached me."Frank Beard and Dusty Hill declined to be interviewed for this story, but Hill did respond to fact-checking questions by email via his manager — the first time either ZZ Top member has ever publicly acknowledged involvement in the Zombies scheme. Like Ramsey, however, Hill said he couldn’t recall how the band got started: "It was the '60s, man." Ramsey believes they were connected with Delta Promotions through someone Meador met on tour with the Gentlemen in Florida. The players were told that the operation was perfectly legal, according to Ramsey.“As far as the Zombies, I was told they didn't exist," he recalls. "That they were only a studio sound. I was just excited and flattered. I'd only been playing for a few years and the other guys were pro-level at that point. I didn't look at it as anything more than a chance to have some fun, hang out with some cool guys, learn some songs, go somewhere outside of this Hillbillyville, and earn a little money."As a warm-up for the Zombies tour, Delta Promotions asked the Texas Zombies to go on a short tour as a different, less successful, also recently disbanded group called the Rose Garden, a Los Angeles folk-rock quintet who had a Top 20 hit in 1967 with the song “Next Plane to London.” Ramsey remembers it being the only Rose Garden song they bothered learning; the rest of their set was blues. To everyone’s satisfaction, a small run of shows in the South went off without incident.Audiences were so starved for live music that no one confronted the fake Rose Garden despite the fact that the real Rose Garden had a female lead singer, Diana DeRose. (DeRose hailed from West Virginia, but reportedly told people she was from Blackpool, England; fact-checking was not a priority in this era.) “People did start asking where the girl was, but we did OK,” recalls Hill. The lack of repercussions emboldened them when they decided to tour without a keyboard player for their Zombies gigs. Ramsey remembers Beard telling people their keyboardist had gotten busted in Dallas and was stuck in jail.After their Rose Garden tour, Ramsey, Meador, Hill, and Beard headed to Michigan to meet with the Delta Promotions team, get photos taken, and start their run as the Zombies. They were told to use their own clothes for the shoot — that’s where the cowboy hats came in."You'll notice both Dusty and Frank are using stage names," Ramsey says of the signed promo shot. "So, it's almost like they knew something was wrong here. Seab signed his real name like me, probably because, like me, he didn't think we were doing anything wrong."The building that housed the Delta Promotions offices still stands, just as it did in 1969, alone on a dusty stretch of Tuscola Road on the outskirts of Bay City, Michigan. From this secluded spot, local businessman Bill Kehoe and his partner Jim Atherton managed Question Mark and the Mysterians and a number of smaller local bands. Tom Hocott was the first employee of Delta Promotions. He now lives in Grand Rapids where he plays music and lives a quiet life. He reluctantly agreed to meet me at a Chili’s outside of town to discuss his time with Delta Promotions. When we sit down to eat, he places a manila envelope on the table. He keeps his hand on it while telling me the story of his involvement with the fake Zombies.Before the decline of the major label system and the rise of the internet and social media, enterprising and less than scrupulous businessmen ran the industry with relative impunity, with artists serving primarily as commodities to be exploited. Famously, Elvis’s manager Colonel Tom Parker pocketed anywhere from 25 to 50% of the star’s gross income for the duration of his career. Allen Klein, who managed the Rolling Stones after the release of “(I Can’t Get No) Satisfaction” in 1965, promptly signed the band’s publishing rights to his own company ABKCO, resulting in a string of lawsuits spanning decades. If this treatment was the norm for the era's biggest stars, it's not hard to imagine how lesser lights would fare.Delta promoted its groups and put on shows at Band Canyon, the venue Kehoe owned in Bay City. “I remember it starting out pretty legitimate,” Hocott says. “Then Kehoe and Atherton started telling me that they’d acquired the rights to the music and the names of these bigger bands like the Zombies and the Animals … I knew it was probably bullshit but I guess I didn’t care. I was happy to be working in music.” Hocott is the only Delta Promotions employee who would talk about the operation. Bill Kehoe died in 1990. As for Kehoe’s partner Jim Atherton, Tom Hocott heard a rumor he’d been shot in Grand Rapids a few years after Delta Promotions folded but there is no record of this occurring. Attempts to locate Atherton were unsuccessful.Delta Promotions was the first to notice the Zombies void in America. The plan was simple: Find competent musicians, convince them Delta was on the level, get them to a reasonable point of Zombies-like ability, and send them on the road. Once the prep was completed, they’d send the bands on tour while Delta took a healthy slice of the profits. Bay City, quiet and isolated from any prominent record labels or magazines, proved the perfect spot to operate. Delta could work in relative obscurity, sending its fake bands into metropolitan areas to absorb the risks while Kehoe and Atherton and Hocott laid low. As for how the Texas Zombies got on Delta’s radar, Hocott remembers Atherton having connections in Florida. He also recalls meeting someone who matches the description of Seab Meador months before the Texas Zombies tour.“This guy,” he says, pointing at a photo I show him of Seab Meador. “He came through Michigan first. I remember that haircut and he played a red Gibson Flying V guitar.” In one of the photos Ramsey handed me, Seab Meador is seen playing a red Flying V.Delta had a history of shady business ventures. Early in Hocott’s employment he, along with a few other employees (including Jim Atherton), was busted for selling drugs out of the Delta offices. The police also found firearms on the premises. Hocott spent a few nights in jail. He believes his boss, Bill Kehoe, pulled strings with his friends in local government to get him out. The charges against all of them were dropped.June 22, 1969, was a rough night for the Original "Zombies." According to the Saginaw News, the band were “especially disappointing” and “the crowd began to leave during their fourth tune.” The newspaper also says the band didn’t sound like they did back when they were selling millions of records. The change in sound is attributed to “a complete transition of band members…except the bass player.”The other bands on the bill didn’t fare much better. The shambolic and chaotic nature of the Michigan rock 'n' roll scene was on full display that night. Openers Dick Rabbit threw copies of their new single into the crowd. According to the review, “Several of the records were thrown back” once the band started playing. Headliners and local heroes Question Mark and the Mysterians fared no better. They performed the entire first song before realizing the mics weren’t working. The one song everyone in the crowd came to see, “96 Tears,” could not be performed because the band’s organist had quit a week earlier, and they couldn’t find anyone to fill in. According to the review, “When their 40-minute set was finally finished…there was no applause — nothing but dead silence.”This account makes it easy to understand how a group of guys from Texas could breeze into a town calling themselves the Zombies, play a show, and then leave without incident. Locally produced rock 'n' roll shows were often a disorganized mess. Most local reviews from the era mention bad sound, shoddy playing, and unimpressed audiences. The fake Zombies fared no worse than the real Question Mark and the Mysterians, who were themselves something of an off-brand version of their original incarnation by 1969, featuring only one original member. Even the real bands felt like impostors.“I think the reviewer must have been drunk," Mark Ramsey says of the Saginaw show. "I don’t remember anyone walking out. Were we perfect? No, and we weren’t the Zombies. We were a blues rock band from Texas, a band with plenty of good looks, better than the original Zombies.”They played small clubs in Michigan and Wisconsin and went up into Canada, where they appeared on TV and played a gig in a prison — it’s there where Ramsey’s story begins to differ from that of Tom Hocott. “I have a feeling that they kinda divided from Delta promotions and did their own thing," Hocott says. "Can you imagine? I never would have sent them to prison!”"I can’t remember how we got the gig," remembers Dusty Hill, "but I remember a stagehand, an inmate, who was joking about escaping in my guitar case.”Delta kept its operation simple. Hocott says the concert promoters in most cities knew they were getting fake versions of real bands. They operated as independent entities, each taking a huge percentage of the money earned. The bands had little recourse in asking for more. Ramsey remembers earning about $200 a week. As for the fans who were getting swindled, Hocott says, “When they were told, ‘Here’s the Zombies,’ they bought it. Even the strange parts, like the fact that they were touring without a keyboardist.” Fans left disappointed and the bands left town as quickly as possible. The less remembered, the better. "Then these guys came along."Hocott opens the manila envelope and hands me a stack of photos of the other fake Zombies. They are dressed in muted, vaguely psychedelic garb, ascots and striped trousers. It’s closer to the look of the actual Zombies. The second fake Zombies were a five-piece from nearby Marquette, Michigan, right in Delta’s backyard.The band was made up of members of the Excels, a Beach Boys–inspired band who would’ve likely played at Kehoe’s club, Band Canyon. They were a regional success during the mid '60s, recording a number of singles that charted on local radio. Hocott’s photos of the Michigan Zombies suggest that several of the Excels took part in the fake Zombies; he claims he does not recall any of their names. Multiple phone calls and messages to the surviving members of the Excels were not returned.“They were so damn good," Hocott says. "They were the perfect Zombies. If you heard them play ‘Time of the Season’ you couldn’t tell the difference.” They were so good that Delta Promotions felt comfortable increasing the size and scale of the tours. “They had a tour bus,” Hocott says. “We sent a road manager out with them.”Hocott reaches into the envelope and pulls out a second photo. It’s another press shot. I recognize it immediately. The cowboy hats are hard to mistake.In a Rolling Stone article from December 13, 1969, titled "The ‘Zombies' Are A Stiff," Chris White chastises the impostors for “taking money from our fans and dragging down our reputation.” He goes on to recount an incident where the fakes “had the cheek to phone up [the label] in Dallas and ask for $1,000 in publicity money.”Dusty Hill refutes this accusation: “We were just making whatever we were making and happy to get some money to get another band together, but we didn’t do that.”There is no information in the article about the fake band members themselves but there is mention of a specific show on October 21, in Los Angeles at the Whiskey A Go-Go. As White remembers it now, friends of original Zombie Paul Atkinson went to this gig and managed to get the impostors on tape. “He had someone go along with a tape recorder as a journalist. They had a guitar player calling himself [actual Zombies drummer Hugh] Grundy. They asked him why he was now out front as the singer and he said, in a Northern England accent, ‘Well, the boys wanted me out front and I’m the only original member.’ Then the interviewer said, 'Didn’t you used to be 5’10”?' This guy was 5’6”. We had it on tape, but I don’t know where it’s gone to now."In most cases, Delta Promotions would claim its bands had one original member, as it did with the Saginaw News. When Rolling Stone contacted Bill Kehoe for comment in December 1969, he claimed that the “American Zombies” formed after “the lead singer of the Zombies was killed, and two other guys left.” He goes on to brazenly inform the magazine that the current Zombies are the second incarnation he’s created. “They’re not a new group. They used to be the Excels.”Chris White recounts a meeting at his label, CBS Records, in New York. Promoters at a radio station noticed the Zombies were coming to town and wanted to talk to him. “I said, ‘Well, it’s not the real Zombies, we are here.' They said, ‘We don’t know, you might be the fake Zombies. How do I know you’re really Chris White?’ That’s when we decided to go back and do the third album and establish that we were alive.”Reforming the band wasn’t something anyone was eager to do. Rod Argent and Chris White had a new band, Argent, while singer Colin Blunstone had started his solo career. But the existence of the fake Zombies provided a strong incentive. If a fan went to see the impostor band and left disappointed, it’s unlikely they’d purchase a record or buy a ticket to a future concert by one of the real band’s members. But despite their efforts, they abandoned the recording and wouldn’t release the proof-of-life album (RIP) until 2010.Backlash from the bands whose identities it had effectively stolen ballooned to the point where Delta could no longer keep up its charade. The beginning of the end came when a fake version of the Animals created by Delta were confronted at a performance by the founder of the actual Animals, Eric Burdon. According to an article in the May 28, 1970, issue of Rolling Stone by Ben Fong-Torres, Burdon had shown up to the show with a baseball bat. Tom Hocott remembers getting a phone call from one of the fake Animals recounting this same story. “Eric Burdon and a bunch of bikers chased them around and threatened them,” he says. Burdon was contacted for this story; his wife Marianna responded with an email saying, “I asked Eric if he has any recollections of the incident you mentioned, but he doesn't really.”The Rolling Stone article also mentions the existence of another fraudulent Delta Promotions group, and the one that would finally lead to the company’s undoing: the Archies. The Archies were a cartoon — not the way Keith Richards or Gene Simmons are cartoons but actual cartoons. They were a fictitious band comprising characters from the Archie Comics universe, an entity controlled by Don Kirshner, who also created the Monkees. Kirshner was an excellent producer and shrewd businessman. He took the popularity of the comic book characters and turned it into hit records like “Sugar Sugar” and “Jingle Jangle.” Hocott believes the fake Archies consisted of members of a folk group called the Bluesberry Jam.While it might seem like this would be the easiest con to pull off for Delta, since there were no real Archies at all, that was not the case. Unlike the disbanded rock bands and their labels, Kirshner Productions was a well-oiled machine ready to take down any dubious claims to the music of its properties. “We’ve heard about this group and our lawyers are taking action,” Kirshner, who died in 2011, told Rolling Stone.Kirshner’s words in the magazine must have given Bill Kehoe cause for concern. Just two weeks after the article ran, a headline appeared in the Bay City Times: "Band Promoter Quits, Blasts DJs, Mafia." The article was Kehoe’s attempt to get out in front of the controversy. He expressed disgust and exhaustion with the music business, without mentioning the lawsuits (and baseball bats) encroaching on the Delta operation. “We never represented to anyone that these were the same groups who made the records," Kehoe claimed. This is in direct opposition to statements from disc jockeys and promoters in the Rolling Stone story who say Delta provided phony affidavits claiming the bands featured original members. One DJ says such documents were promised by Delta but never delivered.Later in the Bay City Times article, Kehoe turned his ire to the bands themselves. “In two years, I lost $20,000 in the business. One of the groups wrecked a bus we bought for them and some didn’t pay us back money we advanced them,” he said, adding that his pet peeve is “groups who cheat us every chance they can.”When I mention Kehoe’s claim, Ramsey responds, “I was making $200 a week and it wasn’t like we’d play a night and then get a few days off. They had us playing shows every single night." After closing up shop, Kehoe poured his time into his legitimate business dealings, including his music venue Band Canyon and, later, an engineering company. His obituary does not mention his time working in the music business. “It just didn’t work out,” he said. “When all you do is lose money…there’s not much to do but quit. But regardless of what others would have you think, at least I can quit knowing I stayed honest.”With Delta Promotions dissolved under pressure from outside, the bands on the Delta roster headed back home. The Texas Zombies returned to Dallas where they ditched their Zombies past and returned to their normal lives. Seab Meador was in the Werewolves, who made two albums for RCA records; he died of a brain tumor on January 24, 1980. Mark Ramsey decided to go to college, studying to become a teacher, but kept his chops up in case Seab, Dusty, or Frank ever needed a guitarist. When Meador died, Ramsey gave up on the rock 'n' roll dream. “It just changed for me. He was sweet and kind. I just kinda stopped wanting that life."Hill and Beard formed ZZ Top with guitarist and singer Billy Gibbons; they released their first album in 1970 and have since sold around 60 million albums worldwide. Ramsey crossed paths with them a few times over the years that followed before all communication eventually stopped.About 10 years ago, Tom Hocott claims he tried to talk to Dusty Hill backstage at a ZZ Top gig in Grand Rapids. He hoped for a brief audience with Hill — one conversation to fill in the gaps that still remained for him in the story, to congratulate Hill on his success, and to reminisce about the strange history that they both shared. But Hill turned Hocott away. “He acted like he didn’t even remember,” Hocott recalls. ("I'll say it again," Hill responds. "It was the '60s.")Backstage at the Saban Theatre, I ask Chris White if, 46 years later, any hard feelings remain. “No, not at all," he says with a laugh. "There’s no bitterness there.” •

Wells Fargo - WikipediaWells FargoFrom Wikipedia, the free encyclopediaJump to navigationJump to searchFor other uses, see Wells Fargo (disambiguation).Wells Fargo & CompanyCompany logo since 2009Wells Fargo's headquarters complex in San Francisco, CaliforniaTypePublicTraded asNYSE: WFCS&P 100 componentS&P 500 componentISINUS9497461015IndustryBankingFinancial servicesInsurancePredecessorsCollapsible list[show]FoundedMarch 18, 1852 (167 years ago) in San Francisco, California, USFoundersHenry WellsWilliam FargoHeadquarters420 Montgomery Street, San Francisco, California, USNumber of locations8,050 branches (2018)13,000 ATMs (2018)Area servedWorldwideKey peopleElizabeth Duke(Chair)C. Allen Parker(Interim President & CEO)John R. Shrewsberry(CFO)ProductsCollapsible list[show]RevenueUS$86.40 billion (2018)Operating incomeUS$30.28 billion (2018)Net incomeUS$22.39 billion (2018)Total assetsUS$1.895 trillion (2018)Total equityUS$197.06 billion (2018)OwnerBerkshire Hathaway (10%)Membersc.70 million (2018)Number of employeesc.258,700 (2018)SubsidiariesWells Fargo AdvisorsWells Fargo Bank, N.A.Wells Fargo RailWells Fargo SecuritiesRatingFitch: A+ (2018)Moody's: A2 (2018)S&P: A− (2018)Websitewellsfargo.comFootnotes / references[1][2][3][4][5][6][7][8]Wells Fargo branch in Berkeley, CaliforniaWells Fargo & Company is an American multinational financial servicescompany headquartered in San Francisco, California, with central offices throughout the United States.[9]It is the world's fourth-largest bank by market capitalization and the fourth largest bank in the US by total assets.[10][11]Wells Fargo is ranked #26 on the 2018 Fortune 500 rankings of the largest US corporations by total revenue.[12]In July 2015, Wells Fargo became the world's largest bank by market capitalization, edging past ICBC,[11]before slipping behind JPMorgan Chase in September 2016, in the wake of a scandal involving the creation of over 2 million fake bank accounts by Wells Fargo employees.[10]Wells Fargo fell behind Bank of America to third by bank deposits in 2017[13]and behind Citigroup to fourth by total assets in 2018.[14]The firm's primary operating subsidiary is national bank Wells Fargo Bank, N.A., which designates its main office as Sioux Falls, South Dakota. Wells Fargo in its present form is a result of a merger between San Francisco–based Wells Fargo & Company and Minneapolis-based Norwest Corporation in 1998 and the subsequent 2008 acquisition of Charlotte-based Wachovia. Following the mergers, the company transferred its headquarters to Wells Fargo's headquarters in San Francisco and merged its operating subsidiary with Wells Fargo's operating subsidiary in Sioux Falls. Along with JPMorgan Chase, Bank of America, and Citigroup, Wells Fargo is one of the "Big Four Banks" of the United States.[15]As of June 2018, it had 8,050 branches and 13,000 ATMs.[2]In 2018 the company had operations in 35 countries with over 70 million customers globally.[2]In February 2014, Wells Fargo was named the world's most valuable bank brand for the second consecutive year[16]in The Banker and Brand Financestudy of the top 500 banking brands.[17]In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public companies in the world and ranked 27th on the Fortune 500 list of the largest companies in the US.[7][18]In 2015, the company was ranked the 22nd most admired company in the world, and the 7th most respected company in the world.[7]As of December 2018, the company had a Standard & Poors credit rating of A−.[8]However, for a brief period in 2007, the company was the only AAA‑rated bank, reflecting the highest credit rating from two firms.[19]On February 2, 2018, the US Federal Reserve Bank barred Wells Fargo from growing its nearly US$2 trillion-asset base any further, based upon years of misconduct, until Wells Fargo fixes its internal problems to the satisfaction of the Federal Reserve.[20]In April 2018, The Wall Street Journal reported that the US Department of Labor had launched a probe into whether Wells Fargo was pushing its customers into more expensive retirement plans as well as intoretirement funds managed by Wells Fargo itself.[21][22]Subsequently in May 2018, The Wall Street Journal reported that Wells Fargo's business banking group had improperly altered documents about business clients in 2017 and early 2018.[23]In June 2018, Wells Fargo began retreating from retail bankingin the Midwestern United States by announcing the sale of all its physical bank branch locations in Indiana, Michigan, and Ohio to Flagstar Bank.[24][13]Contents1History1.1Wells Fargo History Museums1.2Key dates1.3Wachovia acquisition1.4Investment by US Treasury Department during 2008 financial crisis1.4.1History of Wells Fargo Securities1.5Environmental record2Operations and services2.1Community banking2.1.1Consumer lending2.1.2Wells Fargo private student loans2.1.3Equipment lending2.2Wealth and Investment Management2.2.1Wells Fargo Asset Management2.2.2Wells Fargo Securities2.3Cross-selling2.4International operations2.5Charter3Lawsuits, fines and controversies3.11981 MAPS Wells Fargo embezzlement scandal3.2Higher costs charged to African-American and Hispanic borrowers3.3Failure to monitor suspected money laundering3.4Overdraft fees3.5Settlement and fines regarding mortgage servicing practices3.6SEC fine due to inadequate risk disclosures3.7Lawsuit by FHA over loan underwriting3.8Lawsuit due to premium inflation on forced place insurance3.9Lawsuit regarding excessive overdraft fees3.102015 Violation of New York credit card laws3.11Executive compensation3.12Tax avoidance and lobbying3.13Prison industry investment3.14SEC settlement for insider trading case3.15Wells Fargo account fraud scandal3.16Racketeering lawsuit for mortgage appraisal overcharges3.17Dakota Access Pipeline investment3.18Failure to comply with document security requirements3.19Connections to the gun industry and NRA3.20Discrimination against female workers3.21Auto insurance4CEO-to-worker pay ratio5See also6Notes7References8External linksHistory[edit]Main article: History of Wells FargoWells Fargo History Museums[edit]The company operates 12 museums, most known as a Wells Fargo History Museum,[25]in its corporate buildings inCharlotte, North Carolina, Denver, Colorado, Des Moines, Iowa, Los Angeles, California, Minneapolis, Minnesota,Philadelphia, Pennsylvania, Phoenix, Arizona, Portland, Oregon, Sacramento, California and San Francisco, California. Displays include original stagecoaches, photographs, gold nuggets and mining artifacts, the Pony Express, telegraphequipment and historic bank artifacts. The company also operates a museum about company history in the Pony Express Terminal in Old Sacramento State Historic Park in Sacramento, California, which was the company's second office,[26]and the Wells Fargo History Museum in Old Town San Diego State Historic Park in San Diego, California.[27]Wells Fargo operates the Alaska Heritage Museum in Anchorage, Alaska, which features a large collection of Alaskan Native artifacts, ivory carvings and baskets, fine art by Alaskan artists, and displays about Wells Fargo history in the Alaskan Gold Rush era.[28]Key dates[edit]A late 19th Century Wells Fargo Bank in Apache Junction, Arizona1879 Wells Fargo Stagecoach on exhibit in the Wells Fargo Museum in PhoenixThe Wells Fargo Stage Stop built in 1872 in Black Canyon City, ArizonaWells Fargo bank in Chinatown,Houston, TexasA remodeled Wells Fargo bank inFort Worth, TexasWells Fargo in Laredo, Texas1852: Henry Wells and William G. Fargo, the two founders of American Express, formed Wells Fargo & Company to provide express and banking services to California.1860: Wells Fargo gained control of Butterfield Overland Mail Company, leading to operation of the western portion of the Pony Express.1866: "Grand consolidation" united Wells Fargo, Holladay, and Overland Mail stage lines under the Wells Fargo name.1905: Wells Fargo separated its banking and express operations; Wells Fargo's bank was merged with the Nevada National Bank to form the Wells Fargo Nevada National Bank.1918: As a wartime measure, the US Federal Government nationalized Wells Fargo's express franchise into a federal agency known as the US Railway Express Agency. The US Federal Government took control of the express company. The bank began rebuilding but with a focus on commercial markets. After the war, REA was privatized and continued service until 1975.1923: Wells Fargo Nevada merged with the Union Trust Company to form the Wells Fargo Bank & Union Trust Company.1929: Northwest Bancorporation was formed as a banking association.1954: Wells Fargo & Union Trust shortened its name to Wells Fargo Bank.1960: Wells Fargo merged with American Trust Company to form the Wells Fargo Bank American Trust Company.1962: Wells Fargo American Trust again shortened its name to Wells Fargo Bank.1968: Wells Fargo converted to a federal banking charter, becoming Wells Fargo Bank, N.A. Wells Fargo merged with Henry Trione's Sonoma Mortgage in a $10.8 million stock transfer, making Trione the largest shareholder in Wells Fargo until Warren Buffett and Walter Annenberg later surpassed him.[29]1969: Wells Fargo & Company holding company was formed, with Wells Fargo Bank as its main subsidiary.1982: Northwest Bancorporation acquired consumer finance firm Dial Finance which is renamed Norwest Financial Service the following year.1983: Northwest Bancorporation was renamed Norwest Corporation.1983: White Eagle, largest US bank heist to date took place at a Wells Fargo depot in West Hartford, Connecticut.1986: Wells Fargo acquired Crocker National Corporation from Midland Bank.1987: Wells Fargo acquired the personal trust business of Bank of America.1988: Wells Fargo acquired Barclays Bank of California from Barclays plc.[30]1995: Wells Fargo became the first major US financial services firm to offer Internet banking.1996: Wells Fargo acquired First Interstate Bancorp for US$11.6 billion.[31]1998: Wells Fargo Bank was acquired by Norwest Corporation of Minneapolis.[32](Norwest was the surviving company; however, it chose to continue business under the more well-known Wells Fargo name.)2000: Wells Fargo Bank acquired National Bank of Alaska.[33]2000: Wells Fargo acquired First Security Corporation.[34]2001: Wells Fargo acquired H.D. Vest Financial Services for US$128 million, but sold it in 2015 for US$580 million.[35]2007: Wells Fargo acquired CIT's construction unit.[36]2007: Wells Fargo acquired Placer Sierra Bank.2007: Wells Fargo acquired Greater Bay Bancorp, which had US$7.4 billion in assets, in a US$1.5 billion transaction.[37][38]2008: Wells Fargo acquired United Bancorporation of Wyoming.[39]2008: Wells Fargo acquired Century Bancshares of Texas.[40]2008: Wells Fargo acquired Wachovia Corporation.2009: Wells Fargo acquired North Coast Surety Insurance Services.[41]2012: Wells Fargo acquired Merlin Securities.[42][43]2012: Wells Fargo acquired stake in The Rock Creek Group LP.2019: CEO Tim Sloan resigns causing stock to jump and leaves General Counsel Allen Parker as Interim CEOWachovia acquisition[edit]A former Wachovia branch converted to Wells Fargo in the fall of 2011 in Durham, North CarolinaOn October 3, 2008, Wachovia agreed to be bought by Wells Fargo for about US$14.8 billion in an all-stock transaction. This news came four days after the USFederal Deposit Insurance Corporation (FDIC) made moves to have Citigroup buy Wachovia for US$2.1 billion. Citigroup protested Wachovia's agreement to sell itself to Wells Fargo and threatened legal action over the matter. However, the deal with Wells Fargo overwhelmingly won shareholder approval since it valued Wachovia at about seven times what Citigroup offered. To further ensure shareholder approval, Wachovia issued Wells Fargo preferred stock that holds 39.9% of the voting power in the company.[44]On October 4, 2008, a New York state judge issued a temporary injunction blocking the transaction from going forward while the situation was sorted out.[45]Citigroup alleged that they had an exclusivity agreement with Wachovia that barred Wachovia from negotiating with other potential buyers. The injunction was overturned late in the evening on October 5, 2008, by New York state appeals court.[46]Citigroup and Wells Fargo then entered into negotiations brokered by the FDIC to reach an amicable solution to the impasse. Those negotiations failed. Sources say that Citigroup was unwilling to take on more risk than the US$42 billion that would have been the cap under the previous FDIC-backed deal (with the FDIC incurring all losses over US$42 billion). Citigroup did not block the merger, but indicated they would seek damages of US$60 billion for breach of an alleged exclusivity agreement with Wachovia.[47]Investment by US Treasury Department during 2008 financial crisis[edit]On October 28, 2008, Wells Fargo was the recipient of US$25 billion of Emergency Economic Stabilization Act funds in the form of a preferred stock purchase by the US Treasury Department.[48][49]Tests by the US Federal Government revealed that Wells Fargo needed an additional US$13.7 billion in order to remain well capitalized if the economy were to deteriorate further under stress test scenarios. On May 11, 2009, Wells Fargo announced an additional stock offering which was completed on May 13, 2009, raising US$8.6 billion in capital. The remaining US$4.9 billion in capital was planned to be raised through earnings. On Dec. 23, 2009, Wells Fargo redeemed the US$25 billion of preferred stock issued to the US Treasury. As part of the redemption of the preferred stock, Wells Fargo also paid accrued dividends of US$131.9 million, bringing the total dividends paid to US$1.441 billion since the preferred stock was issued in October 2008.[50]History of Wells Fargo Securities[edit]Wells Fargo Securities was established in 2009 to house Wells Fargo's capital markets group which it obtained during the Wachovia acquisition. Prior to that point, Wells Fargo had little to no participation in investment banking activities, though Wachovia had a well established investment banking practice which it operated under the Wachovia Securities banner.Wachovia's institutional capital markets and investment banking business arose from the merger of Wachovia and First Union. First Union had bought Bowles Hollowell Connor & Co. on April 30, 1998 adding to its merger and acquisition, high yield, leveraged finance, equity underwriting, private placement, loan syndication, risk management, and public financecapabilities.[51]Legacy components of Wells Fargo Securities include Wachovia Securities, Bowles Hollowell Connor & Co., Barrington Associates, Halsey, Stuart & Co., Leopold Cahn & Co., Bache & Co.. Prudential Securities, A.G. Edwards, Inc. and the investment banking arm of Citadel LLC.[52]Duke Energy Center in Charlotte, North Carolina home of Wells Fargo Securities[53]Environmental record[edit]In 2009, Wells Fargo ranked #1 among banks and insurance companies, and #13 overall, inNewsweek Magazine's inaugural "Green Rankings" of the country's 500 largest companies.[54]In 2013, the company was recognized by the EPA Center for Corporate Climate Leadership as a Climate Leadership Award winner, in the category "Excellence in Greenhouse Gas Management (Goal Setting Certificate)"; this recognition was for the company's aim to reduce its absolute greenhouse gas emissions from its US operations by 35% by 2020 versus 2008 levels.[55]As of 2013, Wells Fargo had provided more than US$6 billion in financing for environmentally beneficial business opportunities, including supporting 185 commercial-scale solar photovoltaic projects and 27 utility-scale wind projects nationwide.[56][better source needed]Wells Fargo has launched what it believes to be the first blog among its industry peers to report on its environmental stewardship and to solicit feedback and ideas from its stakeholders.[57][58]We want to be as open and clear as possible about our environmental efforts – both our accomplishments and challenges – and share our experiences, ideas and thoughts as we work to integrate environmental responsibility into everything we do," said Mary Wenzel, director of Environmental Affairs. "We also want to hear and learn from our customers. By working together, we can do even more to protect and preserve natural resources for future generations.—Mary Wenzel, director of Environmental Affairs, Wells Fargo, 2010 press releaseOperations and services[edit]Map of Wells Fargo branches in August 2015Wells Fargo delineates three different business segments when reporting results:Community Banking; Wholesale Banking; and Wealth, Brokerage and Retirement.Community banking[edit]The Community Banking segment includes Regional Banking, Diversified Products, and Consumer Deposits groups, as well as Wells Fargo Customer Connection (formerly Wells Fargo Phone Bank, Wachovia Direct Access, the National Business Banking Center, and Credit Card Customer Service). Wells Fargo also has around 2,000 stand-alone mortgage branches throughout the country.[59]There are mini-branches located inside of other buildings, which are almost exclusively grocery stores, that usually contain ATMs, basicteller services, and, space permitting, an office for private meetings with customers.[60]In March 2017, Wells Fargo announced a plan to offer smartphone-based transactions with mobile wallets including Wells Fargo Wallet, Android Pay and Samsung Pay.[61]Consumer lending[edit]As of Q3 2011, Wells Fargo Home Mortgage was the largest retail mortgage lender in the United States, originating one out of every four home loans.[62]Wells Fargo services US$1.8 trillion in home mortgages, the second largest servicing portfolio in the US[63]It was reported in 2012 Wells Fargo reached 30% market share for US mortgages, however, the then-CEO John Stumpf had said the numbers were misleading because about half of that share represented the aggregation of smaller loans that were then sold on in the secondary market. In 2013, its share was closer to 22%; of which eight percentage points was aggregation.[64]Wells Fargo private student loans[edit]Wells Fargo private student loans are available to students to pay for college expenses, such as tuition, books, computers, or housing.[65]Loans are available for undergraduate, career and community colleges, graduate school, law school and medical school. Wells Fargo also provides private student loan consolidation and student loans for parents.[citation needed]Equipment lending[edit]Wells Fargo has various divisions that finance and lease equipment to different types of companies.[66][citation needed]One venture is Wells Fargo Rail, which in 2015 agreed to the purchase of GE Capital Rail Services and merged in with First Union Rail.[67]In late 2015, it was announced that Wells Fargo would buy three GE units focused on business loans equipment financing.[68]Wealth and Investment Management[edit]Wells Fargo Advisors headquarters in St. Louis, MissouriWells Fargo offers investment products through its subsidiaries, Wells Fargo Investments, LLC and Wells Fargo Advisors, LLC, as well as through national broker/dealer firms. The company also serves high-net-worth individuals through its private bank and family wealthgroup.The logo for Wells Fargo AdvisorsWells Fargo Advisors is the brokerage subsidiary of Wells Fargo, located in St. Louis, Missouri. It is the third largest brokerage firm in the United States as of the third quarter of 2010 with US$1.1 trillion retail client assets under management.[7]Wells Fargo Advisors was known as Wachovia Securities until May 1, 2009, when it legally changed names following the Wells Fargo's acquisition of Wachovia Corporation.In September 2018, Wells Fargo announced to cut 26,450 jobs by 2020 to reduce costs by US$4 billion.[69]Wells Fargo Asset Management[edit]Wells Fargo Funds Management, LLCTypeSubsidiaryIndustryMutual fundsHeadquartersKansas City, MissouriArea servedWorldwideWebsitewellsfargofunds.comWells Fargo Asset Management (WFAM) is the trade name for the mutual funddivision of Wells Fargo & Co. Mutual funds are offered under the Wells Fargo Advantage Funds brand name.Wells Fargo Securities[edit]Wells Fargo Securities, LLCTypeSubsidiaryIndustryInvestment BankingHeadquartersCharlotte, North CarolinaArea servedWorldwideWebsitewww.wellsfargo.com/com/securities/The Seagram Building: Home of Wells Fargo Securities' New York offices and trading floorsWells Fargo Securities (WFS) is the investment banking division of Wells Fargo & Co. The size and financial performance of this group is not disclosed publicly, but analysts believe the investment banking group houses approximately 4,500 employees and generates between US$3 and US$4 billion per year in investment banking revenue. By comparison, two of Wells Fargo's largest competitors, Bank of America and J.P. Morgan Chasegenerated approximately US$5.5 billion and US$6 billion respectively in 2011 (not including sales and trading revenue).[70]WFS headquarters are in Charlotte, North Carolina, with other US offices in New York, Minneapolis, Boston, Houston, San Francisco, and Los Angeles, with international offices in London, Hong Kong, Singapore, and Tokyo.Cross-selling[edit]A key part of Wells Fargo's business strategy is cross-selling, the practice of encouraging existing customers to buy additional banking products.[71]Customers inquiring about their checking account balance may be pitched mortgage deals and mortgage holders may be pitched credit card offers in an attempt to increase the customer's profitability to the bank.[72][73]Other banks have attempted to emulate Wells Fargo's cross-selling practices (described byThe Wall Street Journal as a hard sell technique);[72]Forbes magazine describes Wells Fargo as "better than anyone" at the practice.[73]International operations[edit]Wells Fargo has banking services throughout the world, with offices in Hong Kong, London, Dubai, Singapore, Tokyo,Toronto.[74][75]They operate back-offices in India and the Philippines with more than 3,000 staff.[76]Charter[edit]Wells Fargo operates under Charter #1, the first national bank charter issued in the United States. This charter was issued to First National Bank of Philadelphia on June 20, 1863, by the Office of the Comptroller of the Currency.[77]Traditionally, acquiring banks assume the earliest issued charter number. Thus, the first charter passed from First National Bank of Philadelphia to Wells Fargo through its 2008 acquisition of Wachovia, which had inherited it through one of its many acquisitions.Lawsuits, fines and controversies[edit]A Wells Fargo branch in Logan, Utah1981 MAPS Wells Fargo embezzlement scandal[edit]In 1981, it was discovered that a Wells Fargo assistant operations officer, Lloyd Benjamin "Ben" Lewis, had perpetrated one of the largest embezzlements in history, through its Beverly Drive branch. During 1978 - 1981, Lewis had successfully written phony debit and credit receipts to benefit boxing promoters Harold J. Smith (né Ross Eugene Fields) and Sam "Sammie" Marshall, chairman and president, respectively, of Muhammed Ali Professional Sports, Inc. (MAPS), of which Lewis was also listed as a director; Marshall, too, was a former employee of the same Wells Fargo branch as Lewis. In excess of US$300,000 was paid to Lewis, who pled guilty to embezzlement andconspiracy charges in 1981, and testified against his co-conspirators for a reduced five-year sentence.[78](Boxer Muhammed Ali had received a fee for the use of his name, and had no other involvement with the organization.[79])Higher costs charged to African-American and Hispanic borrowers[edit]Illinois Attorney General Lisa Madigan filed suit against Wells Fargo on July 31, 2009, alleging that the bank steers African Americans and Hispanics into high-cost subprime loans. A Wells Fargo spokesman responded that "The policies, systems, and controls we have in place – including in Illinois – ensure race is not a factor..."[80]An affidavit filed in the case stated that loan officers had referred to black mortgage-seekers as "mud people," and the subprime loans as "ghetto loans."[81]According to Beth Jacobson, a loan officer at Wells Fargo interviewed for a report in The New York Times, "We just went right after them. Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans." The report goes on to present data from the city of Baltimore, where "more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly black neighborhoods."[82]Wells Fargo agreed to pay US$125 million to subprime borrowers and US$50 million in direct down payment assistance in certain areas, for a total of US$175 million.[83][84]Failure to monitor suspected money laundering[edit]In a March 2010 agreement with US federal prosecutors, Wells Fargo acknowledged that between 2004 and 2007 Wachoviahad failed to monitor and report suspected money laundering by narcotics traffickers, including the cash used to buy four planes that shipped a total of 22 tons of cocaine into Mexico.[85]Overdraft fees[edit]In August 2010, Wells Fargo was fined by US District Court judge William Alsup for overdraft practices designed to "gouge" consumers and "profiteer" at their expense, and for misleading consumers about how the bank processed transactions and assessed overdraft fees.[86][87][88]Settlement and fines regarding mortgage servicing practices[edit]On February 9, 2012, it was announced that the five largest mortgage servicers (Ally Financial, Bank of America, Citi,JPMorgan Chase, and Wells Fargo) agreed to a settlement with the US Federal Government and 49 states.[89]The settlement, known as the National Mortgage Settlement (NMS), required the servicers to provide about US$26 billion in relief to distressed homeowners and in direct payments to the federal and state governments. This settlement amount makes the NMS the second largest civil settlement in US history, only trailing the Tobacco Master Settlement Agreement.[90]The five banks were also required to comply with 305 new mortgage servicing standards. Oklahoma held out and agreed to settle with the banks separately.On April 5, 2012, a federal judge ordered Wells Fargo to pay US$3.1 million in punitive damages over a single loan, one of the largest fines for a bank ever for mortgaging service misconduct.[91]Elizabeth Magner, a federal bankruptcy judge in the Eastern District of Louisiana, cited the bank's behavior as "highly reprehensible",[92]stating that Wells Fargo has taken advantage of borrowers who rely on the bank's accurate calculations. She went on to add, "perhaps more disturbing is Wells Fargo's refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods."[93]SEC fine due to inadequate risk disclosures[edit]On August 14, 2012, Wells Fargo agreed to pay around US$6.5 million to settle US Securities and Exchange Commission(SEC) charges that in 2007 it sold risky mortgage-backed securities without fully realizing their dangers.[94][95]Lawsuit by FHA over loan underwriting[edit]On October 9, 2012, the US Federal Government sued the bank under the False Claims Act at the federal court inManhattan, New York. The suit alleges that Wells Fargo defrauded the US Federal Housing Administration (FHA) over the past ten years, underwriting over 100,000 FHA backed loans when over half did not qualify for the program. This suit is the third allegation levied against Wells Fargo in 2012.[96]In October 2012, Wells Fargo was sued by United States Attorney Preet Bharara over questionable mortgage deals.[97]Lawsuit due to premium inflation on forced place insurance[edit]In April 2013, Wells Fargo settled a suit with 24,000 Florida homeowners alongside insurer QBE, in which Wells Fargo was accused of inflating premiums on forced-place insurance.[98]Lawsuit regarding excessive overdraft fees[edit]In May 2013, Wells Fargo paid US$203 million to settle class-action litigation accusing the bank of imposing excessiveoverdraft fees on checking-account customers. Also in May, the New York attorney-general, Eric Schneiderman, announced a lawsuit against Wells Fargo over alleged violations of the national mortgage settlement, a US$25 billion deal struck between 49 state attorneys and the five-largest mortgage servicers in the US. Schneidermann claimed Wells Fargo had violated rules over giving fair and timely serving.[64]2015 Violation of New York credit card laws[edit]In February 2015, Wells Fargo agreed to pay US$4 million for violations where an affiliate took interest in the homes of borrowers in exchange for opening credit card accounts for the homeowners. This is illegal according to New York credit card laws. There was a US$2 million penalty with the other US$2 million going towards restitution to customers.[99]Executive compensation[edit]With CEO John Stumpf being paid 473 times more than the median employee, Wells Fargo ranks number 33 among the S&P 500 companies for CEO—employee pay inequality. In October 2014, a Wells Fargo employee earning US$15 per hour emailed the CEO—copying 200,000 other employees—asking that all employees be given a US$10,000 per year raise taken from a portion of annual corporate profits to address wage stagnation and income inequality. After being contacted by the media, Wells Fargo responded that all employees receive "market competitive" pay and benefits significantly above US federal minimums.[100][101]Tax avoidance and lobbying[edit]In December 2011, the non-partisan organization Public Campaign criticized Wells Fargo for spending US$11 million onlobbying and not paying any taxes during 2008–2010, instead getting US$681 million in tax rebates, despite making a profit of US$49 billion, laying off 6,385 workers since 2008, and increasing executive pay by 180% to US$49.8 million in 2010 for its top five executives.[102]As of 2014 however, at an effective tax rate of 31.2% of its income, Wells Fargo is the fourth-largest payer of corporation tax in the US.[103]Prison industry investment[edit]Main article: Prison–industrial complexThe GEO Group, Inc., a multi-national provider of for-profit private prisons, received investments made by Wells Fargo mutual funds on behalf of clients, not investments made by Wells Fargo and Company, according to company statements.[104]By March 2012, its stake had grown to more than 4.4 million shares worth US$86.7 million.[105]As of November, 2012, the latest SEC filings reveal that Wells Fargo has divested 33% of its dispositive holdings of GEO's stock, which reduces Wells Fargo's holdings to 4.98% of Geo Group's common stock. By reducing its holdings to less than 5%, Wells Fargo will no longer be required to disclose some financial dealings with GEO.[106]While a coalition of organizations, National People's Action Campaign, have seen some success in pressuring Wells Fargo to divest from private prison companies like GEO Group, the company continues to make such investments.[107]SEC settlement for insider trading case[edit]In 2015, an analyst at Wells Fargo settled an insider trading case with the US Securities and Exchange Commission (SEC). The former employee was charged with insider trading alongside an ex-Wells Fargo trader.[108]Sadis & Goldberg obtained a settlement that permitted the client to continue in securities industry, while neither admitting nor denying one charge of negligence-based § 17(a)(3) claim, and paying a US$75,000 civil penalty[109]Wells Fargo account fraud scandal[edit]Main article: Wells Fargo account fraud scandalIn September 2016, Wells Fargo was issued a combined total of US$185 million in fines for creating over 1.5 million checking and savings accounts and 500,000 credit cards that its customers never authorized. The US Consumer Financial Protection Bureau issued US$100 million in fines, the largest in the agency's five-year history, along with US$50 million in fines from the City and County of Los Angeles, and US$35 million in fines from the Office of Comptroller of the Currency.[110]The scandal was caused by an incentive-compensation program for employees to create new accounts. It led to the firing of nearly 5,300 employees and US$5 million being set aside for customer refunds on fees for accounts the customers never wanted.[111]Carrie Tolstedt, who headed the department, retired in July 2016 and received US$124.6 million in stock, options, and restricted Wells Fargo shares as a retirement package.[112][113]On October 12, 2016, John Stumpf, the then Chairman and CEO, announced that he would be retiring amidst the controversies involving his company. It was announced by Wells Fargo that President and Chief Operating Officer Timothy J. Sloan would succeed, effective immediately. Following the scandal, applications for credit cards and checking accounts at the bank plummeted.[114]In response to the event, the Better Business Bureau dropped accreditation of the bank,[115]S&P Global Ratings lowered its outlook for Wells Fargo from stable to negative,[116]and several states and cities across the US ended business relations with the company.[117]An investigation by the Wells Fargo board of directors, the report of which was released in April 2017, primarily blamed Stumpf, whom it said had not responded to evidence of wrongdoing in the consumer services division, and Tolstedt, who was said to have knowingly set impossible sales goals and refused to respond when subordinates disagreed with them.[118]The board chose to use a clawback clause in the retirement contracts of Stumpf and Tolstedt to recover US$75 million worth of cash and stock from the former executives.[118]Racketeering lawsuit for mortgage appraisal overcharges[edit]In November 2016, Wells Fargo agreed to pay US$50 million to settle a racketeering lawsuit in which the bank was accused of overcharging hundreds of thousands of homeowners for appraisals ordered after they defaulted on their mortgage loans. While banks are allowed to charge homeowners for such appraisals, Wells Fargo frequently charged homeowners US$95 to US$125 on appraisals for which the bank had been charged US$50 or less. The plaintiffs had sought triple damages under the U S Racketeer Influenced and Corrupt Organizations Act on grounds that sending invoices and statements with fraudulently concealed fees constituted mail and wire fraud sufficient to allege racketeering.[119]Dakota Access Pipeline investment[edit]Wells Fargo is a lender on the Dakota Access Pipeline, a 1,172-mile-long (1,886 km) underground oil pipeline transportsystem in North Dakota. The pipeline has been controversial regarding its potential impact on the environment.[120]In February 2017, Seattle, Washington's city council unanimously voted to not renew its contract with Wells Fargo "in a move that cites the bank's role as a lender to the Dakota Access Pipeline project as well as its "creation of millions of bogus accounts." and saying the bidding process for its next banking partner will involve "social responsibility." The City Council ofDavis, California, took a similar action voting unanimously to find a new bank to handle its accounts by the end of 2017.[121]Failure to comply with document security requirements[edit]In December 2016, the Financial Industry Regulatory Authority fined Wells Fargo US$5.5 million for failing to store electronic documents in a "write once, read many" format, which makes it impossible to alter or destroy records after they are written.[122]Connections to the gun industry and NRA[edit]Wells Fargo is the top banker for US gun makers and the National Rifle Association (NRA). From December 2012 through February 2018 it reportedly helped two of the biggest firearms and ammunition companies obtain US$431.1 million in loans and bonds. It also created a US$28-million line of credit for the NRA and operates the organization's primary accounts.[123]In a March 2018 statement Wells Fargo said, "Any solutions on how to address this epidemic will be complicated. This is why our company believes the best way to make progress on these issues is through the political and legislative process. ... We plan to engage our customers that legally manufacture firearms and other stakeholders on what we can do together to promote better gun safety for our communities."[123]Wells Fargo's CEO subsequently said that the bank would provide its gun clients with feedback from employees and investors.[124]Discrimination against female workers[edit]Further information: Glass ceilingIn June 2018, about a dozen female Wells Fargo executives from the wealth management division met in Scottsdale, Arizona to discuss the minimal presence of women occupying senior roles within the company. The meeting, dubbed "the meeting of 12", represented the majority of the regional managing directors, of which 12 out of 45 are women.[125]Wells Fargo had previously been investigating reports of gender bias in the division in the months leading up to the meeting.[126]The women reported that they had been turned down for top jobs despite their qualifications, and instead the roles were occupied by men.[126]There were also complaints against company president Jay Welker, who is also the head of the Wells Fargo wealth management division, due to his sexist statements regarding female employees. The female workers claimed that he called them "girls" and said that they "should be at home taking care of their children."[126]Auto insurance[edit]On June 10, 2019, Wells Fargo settled a lawsuit for $ 385 million that was filed in 2017 concerning their customers andNational General Insurance.[127]CEO-to-worker pay ratio[edit]Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, publicly traded companies are required to disclose (1) the median total annual compensation of all employees other than the CEO and (2) the ratio of the CEO’s annual total compensation to that of the median employee.[128]Total 2018 compensation for Timothy J. Sloan, CEO, was $18,426,734, and total compensation for the median employee was estimated to be $65,191. The resulting pay ratio was determined to be 283:1.[129]See also[edit]San Francisco Bay Area portalCompanies portalBanks portalList of Wells Fargo directorsList of Wells Fargo presidentsWells Fargo ArenaWells Fargo Center