Rhode Island has joined a group of institutional investors filing a shareholder proposal demanding Wells Fargo (NYSE:WFC) address recent revelations of widespread consumer fraud and take steps to protect customers and shareholders from illegal predatory banking going forward, General Treasurer Seth Magaziner announced today.
"Wells Fargo allowed millions of Americans to fall victim to widespread fraud and the full extent of the damage to their customers, employees, and shareholders is still unknown," said General Treasurer Seth Magaziner. "On behalf of Rhode Island taxpayers and members of the State's pension system, we are entitled to know what Wells Fargo allowed to happen and what steps they are taking to ensure that it can never happen again."
Thousands of Wells Fargo employees are alleged to have illegally opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for employees and managers. In September of 2016, Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau. This is only the latest in a series of penalties for charges of long-term widespread fraud, ethical lapses and discrimination within the company.
"The Employees' Retirement System of Rhode Island believes that economic and financial prosperity are rooted in ethical businesses practices," writes Treasurer Magaziner in a letter to Wells Fargo. "A full accounting of the root causes of widespread fraudulent activity at the company and a clear plan for corrective action going forward will go a long way toward rebuilding trust and increasing shareholder value."
Rhode Island joins a coalition of investors, including The Sisters of St. Francis of Philadelphia and members of the Interfaith Center on Corporate Responsibility in co-filling a shareholder proposal requesting that Wells Fargo issue a comprehensive, public report on "the root causes of the fraudulent activity and steps taken to improve risk management and steps taken to improve risk management and control processes."
The Office of the Rhode Island General Treasurer believes releasing the requested information is in the company's best interest and adoption of this proposal will lead to stronger investment performance for Rhode Island pension system and all Wells Fargo shareholders.
Wells Fargo Shareholder Proposal
Treasurer Magaziner's Letter to Wells Fargo