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Wells Fargo picks four directors for sales scandal probe: source
[NEW YORK] Wells Fargo & Co chairman Stephen Sanger and vice-chair Elizabeth Duke have been named to a four-member committee that will lead an internal investigation into the bank's recent sales scandal, a person familiar with the matter said on Thursday.
Rounding out the special committee's leadership, the person said, are Enrique Hernandez, chair of the board of directors'risk committee, and Donald James, a director who sits on the board's finance and risk committees.
The source asked not to be identified as the full make-up of the committee has not been made public.
All the directors of the special committee are independent in that they do not work for the company in an operational sense.
Law firm Shearman & Sterling and the board's human resources committee will also work on the investigation, according to an announcement by Wells Fargo's board on Sept 27. The human resources committee has five directors, including Sanger and James.
A spokesman for Wells Fargo declined to comment and Sard Verbinnen, which represents the board, did not immediately respond to requests for comment.
Wells Fargo saw its shares battered in September and October following a US$190 million settlement with two regulators and the City Attorney of Los Angeles over the creation of as many as 2 million accounts set up without customers' authorisation.
The bank fired 5,300 branch employees over the matter, which also led to the resignation of former Chief Executive Officer John Stumpf. A host of investigations and lawsuits are still pending.
Mr Sanger, a former CEO of General Mills Inc, has served on Wells Fargo's board since 2003, while Duke, a former member of the Federal Reserve Board of Governors, has been a director since 2015.
Both the chair and vice-chair positions recently received pay increases. The chairman now receives US$250,000 annually and the vice-chair receives US$100,000. The chair used to be paid US$60,000 plus separate fees for chairing committees.
According to a Sept 8 regulatory settlement, problematic sales practices at Wells Fargo go back to at least 2011.