Finance and investment professionals who watched the first presidential debate between candidates Democratic nominee Hillary Clinton and Republican nominee Donald Trump were probably disappointed that matters related to corporate America weren't discussed at length.
Although he mentioned business and even Wall Street a handful of times, the comments were related to other topics. Hopefully, future debates will address two major issues related to finance: the state of the markets and how corporate malfeasance should be handled.
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The Wells Fargo scandal is tightly centered around him for various reasons. The first has to do with his overly aggressive leadership style, which turned the financial services company and bank into a giant boiler room.
It was under Stumpf's leadership that sales associates were pressured into doing everything they could to ensure that every Wells Fargo customer signed up for eight financial products. This mandate was delivered to managers and supervisors at a time when the U.S. economy was still in recovery mode and the national unemployment rate was still uncomfortably high.
An investigation into the sales practices of the Wells Fargo retail banking division showed that 1.5 million accounts were furtively opened by employees under pressure from their managers. Nearly half a million credit card applications were submitted without permission, and the bank earned more than $2.5 millions in fees charged to account holders without their knowledge.
The Wells Fargo investigation resulted in an executive decision to issue pink slips to more than 5,000 retail associates, who are among the lowest-paid employees at the bank. It took Stumpf three years to communicate his decision to eliminate the products that he aggressively marketed at the beginning of his tenure as chief executive.
A sacrificial lamb has been offered in the name of Carrie Tolstedt, a Wells Fargo manager who retired before the scandal was widely reported. The Wells Fargo executive board has clawed back compensation from her and Stumpf, but shareholders may consider this to be too little, too late.
Americans are no longer content with the "too big to fail" economic doctrine of the Great Recession. When Stumpf appeared before Congress to testify about the Wells Fargo scandal, he was heavily reprimanded by Democratic Senator Elizabeth Warren of Massachusetts.
Getting grilled by a senior senator during an election year isn't something that Wall Street investors appreciate. As expected, former Wells Fargo employees are suing the bank with a class action, and their case is being bolstered by Stumpf's appearance before Congress.
There is a strong chance that the class action may escalate and require testimony from Stumpf. There is also a chance that the Wells Fargo scandal may turn into a presidential debate question.
For these reasons, Wells Fargo shareholders including Warren E. Buffett, chief executive of Berkshire Hathaway, will probably prefer for Stumpf to leave as this matter continues to develop.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in any of the stocks mentioned.