BOSTON Oct 6 Union pension fund adviser CtW
Investment Group on Thursday called on boards of large U.S.
banks to review their employment practices in light of the
scandal over fake customer accounts at Wells Fargo & Co, and
said it likely would not support the re-election of directors
who failed to comply.
The letters come amid a renewed round of scrutiny on
whether big lenders' sales practices have grown too aggressive.
Massachusetts' top securities regulator on Monday charged Morgan
Stanley with "dishonest and unethical conduct" for having pushed
its brokers to sell loans to clients.
CtW, which says it works with union pension funds managing
more than $250 billion, said it sent letters to directors at
banks including JPMorgan Chase & Co, Bank of America,
and Citigroup calling for them to review areas
such as whether workers' pay incentives encourage unethical
behavior, or whether employees might face retaliation for
In its letters CtW said the Wells Fargo case "evinces the
significant risks that inappropriate and poorly designed human
capital management practices may pose to a bank's operations,
reputation, and regulatory standing."
On Sept. 8, San Francisco-based Wells Fargo reached
a $190 million settlement regulators over accusations that it
opened up to 2 million accounts without customers' permission.
Other authorities have since begun probes while Chief Executive
Officer John Stumpf faces political pressure and calls to
CtW's efforts in the past have helped bring about changes
such as the departure of directors from JPMorgan after the
so-called "London Whale" trading debacle. It has also called on
Wells Fargo to take actions such as adding two new directors
with human capital expertise.
Other activists meanwhile have filed shareholder resolutions
calling on Wells Fargo to study a breakup and to split the roles
of chairman and CEO.
Spokespeople for JPMorgan, Bank of America Corp and
Citigroup Inc each declined to comment.
(Reporting by Ross Kerber; Editing by Cynthia Osterman)