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Business

Wells Fargo CEO forced out by accounts scandal

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Opening sequence

Business

Wells Fargo CEO forced out by accounts scandal

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COMING UP:Wells Fargo CEO forced out by accounts scandal

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00:00:00
>> You've clearly failed in your own ethical standards.>> Lambasted on Capitol Hill, shunned by Wall Street and facing outrage on Main Street, Wells Fargo CEO Jonathan Stumpf is finally out of a job. The embattled bank announcing Wednesday Stumpf's immediate retirement. The primary objective for new CEO, Tim Sloane?
00:00:21
Fixing the bank's scandal-ridden image. Also, finding a way to replace the revenue lost from the aggressive cross-selling that resulted in 2 million unauthorized accounts and a $185 million fine. But that won't be easy, says Reuters' banking correspondent Dan Freed.>> It's a big, big job. Because this is something that's been central to their business strategy for years.
00:00:46
I mean, every quarter, they would talk about the number of average products they had sold to every customer inn different units of the bank. And one of the big questions I have when they report earnings on Friday is whether they'll still report that number at all.>> Experts tell Reuters the Herculean task at hand includes a total upheaval of the corporate culture responsible for the misdeeds, and that begins with cleaning house.
00:01:16
>> Gotta fire people up and down the, I mean, they've fired a bunch of low level employees. Then, there's all these middle managers, many of whom were promoted for doing things like firing whistle blowers.>> Replacements will have to be hired, remaining staff will have to retrained, which will be costly, no doubt, and time consuming.
00:01:36
Some experts say, the whole process of introducing new pay structures and safeguards could take as long as three to five years.>> They give lip service, these days, to building relationships with customers. But these guys said, no, you really have to do that, and you have to put it in the way that you pay people.
00:01:53
>> Although no one knows how much all of this will cost, Wall Street is already trying to add up the bill, cutting earnings forecasts ahead of Wells Fargo's third quarter results, which come out on Friday. Analysts will be looking for any signs that estimates haven't come down far enough.