Wells Fargo & Co (NYSE:WFC) was struck Friday by a shakeup in the boardroom.
CEO Tim Sloan is leaving the executive suite at a bank that has faced accusations of predatory lending, the creation of fraudulent customer savings and checking accounts and the forced sale of auto insurance to loan clients.
Sloan is retiring effective June 30 and is stepping down immediately from his roles as CEO, president and board member, Wells Fargo said in a Thursday afternoon statement.
The Board has elected C. Allen Parker, who served as the Company’s General Counsel, as interim CEO and President (and member of the Board), effective immediately. An external search process will now begin for the Company’s new CEO and President.
Sloan, the three-decade Wells Fargo veteran who was supposed to clean up the mess that had claimed his predecessor, had struggled to satisfy regulators' demands to overhaul the sprawling institution.
Problems at the fourth biggest U.S. bank came to light in 2016 with the news that employees had created millions of fake accounts to meet sales quotas.
Since then, more issues tied to sales practices have emerged across the bank's business lines, including mortgage, auto lending and wealth management operations.
Last year, the Federal Reserve took the extremely rare step of capping the bank's asset growth after the bank found more problems with customer dealings.
Still, his departure was construed as sudden.
Just two weeks ago, a haggard-looking Sloan testified before Congress about his efforts to clean up the various messes he had inherited. Before the four-hour hearings began, reporters asked Sloan how long he expected to remain CEO, and he replied that he, his board and all of his 260,000 employees thought he was doing a great job.
Shares lost 77 cents, or 1.6%, in the first half-hour to $48.32
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