NYC Pension Fund Loses $41M Since Wells Fargo Fallout
The New York City pension fund is Wells Fargo’s (NYSE:WFC) latest victim in the wake of the phony accounts scandal.
The fund, which provides benefits to the city’s teachers and fire and police departments, has $160B in assets in investment funds.
New York City comptroller Scott Stringer reached out to Wells Fargo three weeks ago, demanding the return of $41 million to the fund’s shareholders.
“Years ago the New York City pension fund actually put in place claw backs so that we can actually go after the CEO, chair of the board if they’re not doing the right thing. So we sent a letter demanding $41 million in pay to come back to the share owners, and I’m glad to say they’re doing that. We’ve also looked at one of the vice presidents [Carrie Tolstedt] we want $19 million back—they’re doing that,” Stringer said during an interview on the FOX Business Network’s Countdown to the Closing Bell.
Stringer described the Wells Fargo scandal as an “entire scam perpetuated on the people of this country” and called for a complete investigation of the third largest bank in the U.S.
“[New York City] Mayor de Blasio and I have also sent another letter saying, ‘look, if you don’t complete an investigation and clean this up, then our pension fund may decide not to do business with you.’ We are not playing around.”
The New York City pension fund has taken a hit since Wells Fargo’s stock plunged 10% as a result of the $185 million fine the bank incurred for creating as many as 2 million fake bank and credit card accounts. Stringer said the pension fund is prepared to end its relationship with the bank unless Wells Fargo ensures the Office of the New York City Comptroller that it will not repeat its fraudulent practice.
“We understand that they cannot get away with this. We’re very concerned. One thing that would make it better for us—we need an independent board. Get rid of the rascals, put in a truly independent board to make the right decisions to how to clean this up,” Stringer told host Liz Claman.
The New York City pension fund includes 198,000 shares in firefighter funds totaling $11 million, and 1.1 million shares in New York teacher’s retirement funds equaling $66 million.
When asked whether he would drop Wells Fargo stock from the fund if the bank doesn’t comply with the comptroller’s requirements, Stringer said, “We made it clear that if they do not clean this mess up in a real way that this is on the table. At the end of the day we could walk away if they don’t do what they’re supposed to do.”