Wells Fargo board slams former CEO Stumpf for accounts scandal, claws back another $28 million

Wells Fargo's board of directors will release its investigation into the bank's recent fraudulent accounts scandal, pinning blame primarily on two former executives.

According to the report, Wells Fargo's board will claw back $28 million in pay from former CEO John Stumpf and $47.3 million former head of community banking Carrie Tolstedt for their roles in the scandal.

The board determined that Stumpf and Tolstedt did not do enough to address the culture at Wells that led employees at the bank to open as many as 2 million credit card and retail banking accounts for customers from 2011 to 2015 without their knowledge.

According to the report, Stumpf was aware of individual issues as far back as 2002 but did not become aware of the systemic nature of the problem until 2012. Even when he did become aware, the board said, Stumpf did not do enough to address the issues.

"Stumpf was by nature an optimistic executive who refused to believe that the sales model was seriously impaired," the report said.

"His reaction invariably was that a few bad employees were causing issues, but that the overwhelming majority of employees were behaving properly. He was too late and too slow to call for inspection of or critical challenge to the basic business model."

The board's criticisms also extended to Tolstedt, who ran the retail banking division in which the fraudulent accounts were opened.

Wells' retail banking division used a practice of "cross-selling," in which employees were encouraged to sign up customers for multiple financial products, leading to what the board called a "high pressure sales culture," according to the report.

The board wrote that Tolstedt "was 'obsessed' with control, especially over negative information about the Community Bank, and extremely reluctant to make changes."

The report said that Tolstedt declined to be interviewed for the investigation on advice from her lawyer.

Wells previously clawed back $41 million from Stumpf in September and decided to forgo 2016 bonuses for their current executives.

Read the full report from Wells Fargo (pdf)»

RELATED: Former Wells Fargo CEO John Stumpf

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Wells Fargo CEO John Stumpf
John Stumpf, President and CEO of Wells Fargo, participates in a panel at the 2015 Fortune Global Forum in San Francisco, California November 2, 2015. REUTERS/Elijah Nouvelage
Wells Fargo CEO John Stumpf speaks during a news conference for Wachovia employees at the Wachovia corporate headquarters in Charlotte, North Carolina, October 15, 2008. REUTERS/Chris Keane (UNITED STATES)
TARP recipient financial institution leaders testify before House Financial Services Committee on Capitol Hill in Washington, February 11, 2009. From left are, Goldman Sachs' Lloyd Blankfein, JPMorgan Chase's Jamie Dimon, Bank of New York's Robert Kelly, Bank of America's Ken Lewis,State Street's Ronald Logue, Morgan Stanley's John Mack, Citi's Vikram Pandit, and Wells Fargo's John Stumpf. REUTERS/Larry Downing (UNITED STATES)
Wells Fargo CEO John Stumpf testifies before a Senate Banking Committee hearing on the firm's sales practices on Capitol Hill in Washington, U.S., September 20, 2016. REUTERS/Gary Cameron TPX IMAGES OF THE DAY
WASHINGTON, DC - SEPTEMBER 20: John Stumpf, chairman and CEO of the Wells Fargo & Company, prepares for testimony before the Senate Banking, Housing and Urban Affairs Committee September 20, 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 Win McNamee/Getty Images)
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., speaks at the Bloomberg Year Ahead: 2014 conference in Chicago, Illinois, U.S., on Wednesday, Nov. 20, 2013. Stumpf said he dislikes Federal Reserve monthly bond purchases at this point in the economic cycle and that the policy has hurt savers. Photographer: Daniel Acker/Bloomberg via Getty Images
NEW YORK, NY - APRIL 30: Wells Fargo CEO John Stumpf (L) speaks with Wall Street Journal Editor in Chief Gerry Baker on FOX Business Networks' 'Opening Bell With Maria Bartiromo' at FOX Studios on April 30, 2015 in New York City. (Photo by Monica Schipper/Getty Images)
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., speaks during an interview in Washington, D.C., U.S., on Thursday, May 7, 2015. Wells Fargo, the fourth-biggest U.S. bank by assets and the nation's leading home lender, in March left Stumpf's pay unchanged at $19.3 million after the firm generated a bigger profit than any other U.S. bank for a second straight year. Photographer: Andrew Harrer/Bloomberg via Getty Images
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., listens to a question during an interview in Washington, D.C., U.S., on Thursday, May 7, 2015. Wells Fargo, the fourth-biggest U.S. bank by assets and the nation's leading home lender, in March left Stumpf's pay unchanged at $19.3 million after the firm generated a bigger profit than any other U.S. bank for a second straight year. Photographer: Andrew Harrer/Bloomberg via Getty Images
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