Wells Fargo’s incoming chief executive, Timothy Sloan, who is replacing CEO John Stumpf who resigned on Wednesday (Oct. 12), will have a lot of work to do, not only because the embattled financial services company is slated to report third quarter results on Friday (Oct. 14) but also because he will need to assuage nervous investors who want to know the impact of its massive fake account scandal.
According to Reuters, investors want reassurances that Wells Fargo can save or rebuild its reputation and change the culture within the company that led to it being fined by the Consumer Financial Protection Bureau due to years of making up fake accounts to reach sales goals.
While Sloan may be a calming force at Wells Fargo that so desperately needs to move past the scandal, Reuters pointed out that in Nov. 2015 he had oversight over the retail division at Wells Fargo, where close to 2 million accounts without customers’ knowledge were opened up.
“The fact they have named him CEO indicates to me that he has at least passed some litmus test about his part in all of this and indicates to me that there was little or no part,” Nancy Bush, an analyst with NAB Research, which owns Wells shares, said in the report. “I know Tim. He has vast experience in every part of Wells Fargo. And yes, I think he is the right man.”
According to Reuters, when Wells Fargo reports earnings, the company is expected to say the amount of money it set aside to cover legal costs, which could come in a lot higher than what anyone thinks. Wells Fargo is facing inquiries from nine separate regulators, prosecutors, enforcement agencies and congressional committees, as well as private lawsuits from shareholders, customers and ex-employees, noted the report.
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