Two Wells Fargo Board Members Leave Ahead Of Congress Hearing

Wells Fargo & Co. WFC  announced on Monday that two directors, including Chairperson Elizabeth Duke, had resigned from the board.

What Happened

Duke and James Quigley resigned from the bank’s board ahead of their appearance in front of the House Financial Services Committee on Wednesday. The Chairperson of the committee, Maxine Waters, called for the resignations of both directors, reported Reuters, effective Sunday.

Wells Fargo is under investigation for its conduct with the regulators after a sales practice scandal was discovered in 2016. The bank opened millions of unauthorized accounts and has since paid $7 billion in fees and penalties.

Duke, former Federal Reserve governor, joined Wells Fargo in 2015 . Quigley joined the board in 2013, and both remained board members after the scandal broke in 2016.

Why It Matters

A house report was released last week ahead of CEO Charles Scharf’s testimony to Congress, alleging the board had failed to ensure management was in compliance with risk management concerns raised by regulators.

The Securities and Exchange Commission has ordered compensation of $35 million to be paid to the banks’ clients after Wells Fargo was found to have advised risky investments to the most vulnerable, including senior citizens and retirees.

What Else Is There

Richard Levy, the executive vice president, and chief accounting officer of the bank, is retiring March 31, after being with the company for 18 years.

Price Action

Wells Fargo shares traded 2.34% higher at $33.24 in the after-hours session on Monday. The shares closed the regular session 12.45% lower at $32.48.