Wells Fargo CEO to retire immediately in wake of scandal

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WASHINGTON, DC - SEPTEMBER 29: John Stumpf, Chairman and CEO of the Wells Fargo & Company, testifies before the House Financial Services Committee September 29, 2016 in Washington, DC. The committee heard testimony on the topic of 'An Examination of Wells Fargo's Unauthorized Accounts and the Regulatory Response.' (Photo by Mark Wilson/Getty Images)

NEW YORK — Embattled Wells Fargo CEO John Stumpf will retire effective immediately, the company announced Wednesday, marking a stunning downfall for one of the banking industry’s most powerful figures.

The Wells Fargo boss is out in the wake of a national uproar that erupted after regulators accused the bank of creating more than two million fake bank and credit card accounts. The company admitted to firing 5,300 workers over several years.

Stumpf’s resignation comes after Senator Elizabeth Warren publicly condemned him for “gutless” leadership at a Sept. 20 Senate hearing. “You should resign. … You should be criminally investigated,” Warren told Stumpf during a fiery one-sided exchange.

The hearing, and another similarly blistering dressing down of Stumpf before House lawmakers a week later, may have helped speed up Stumpf’s demise. While the bank CEO said he was “deeply sorry” and insisted there was no “scheme” to scam customers, he struggled at times to answer lawmakers’ questions. He often gave the impression he wasn’t fully in charge of the company.

Ironically, Stumpf prided himself on Wells Fargo’s work ethic. In a 2015 Fortune interview he called himself the “keeper of our company’s culture.”

Yet former Wells Fargo employees believe it was precisely the bank’s pressure-cooker sales environment that spurred staffers to open thousands of fake accounts.

Tim Sloan, Wells Fargo’s president, will take over as chief executive, and lead director Stephen Sanger will take over Stumpf’s other duties as chairman of the board.

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