An out-of-control sales culture, a defensive boss obsessed with stamping out negative views about her division and a group chief executive who called her the “the best banker in America” were to blame for Wells Fargo & Co’s (WFC. N) devastating sales scandal, an internal investigation found. The probe into how the San Francisco-based bank could have allowed abusive sales practices to fester for years at its branch network laid most of the blame on the former head of the retail division, Carrie Tolstedt, and some of her management team, in a report released to media on Monday. In the report, which was carried out by the bank’s chairman Stephan Sanger and three other independent directors, Tolstedt is blamed for ignoring the systemic nature of the problem which was pinned instead on individual wrongdoers and she was accused of obstructing the board’s efforts to get to the bottom of what was going on. John Stumpf, the chief executive who retired under pressure from the scandal in October, was criticized for failing to grasp the gravity of the sales practice abuses and their impact on the bank. In the 110-page report, Stumpf was described as someone who was blinded by Wells Fargo’s cross-selling success. He refused to believe the model was seriously impaired and was full of admiration for Tolstedt, with whom he had a long working relationship. According to one director, Stumpf praised Tolstedt as the “best banker in America”. The report said Tolstedt hid the scale of the misconduct from the board, which only discovered that 5,300 staff had been fired for opening over 2 million unauthorized accounts when the bank reached a $185 million settlement with regulators in September last year. On the advice of her lawyers, Tolstedt declined to be interviewed for the investigation. Wells Fargo said that she had been fired for cause and it would be forfeiting her outstanding stock options with an approximate value of $47.3 million. Wells Fargo said it had decided to claw back approximately $28 million of Stumpf’s bonus, which was paid in March 2016. In total, the bank has fired five senior retail bank executives, including Tolstedt, over the scandal and has imposed forfeitures, clawbacks and compensation adjustments on senior leaders totaling more than $180 million, including $69 million from Stumpf and $67 million from Tolstedt.

Since the scandal broke, the bank has seen a steady decline in the number of consumers opening checking and credit card accounts and it has lost its status as America’s most valuable bank by market value. THE BOARD Sanger, a board member since 2003, is under pressure to assure investors and regulators that he is rooting out the bank’s problems after a welter of criticism that the board didn’t do enough despite knowing about the problem since 2014. According to the report, multiple board members felt misled by a presentation by Tolstedt and others to the board’s risk committee in May 2015. The board members said they left thinking that between 200 and 300 employees had been fired for sales practice abuses and the problem was largely concentrated in southern California. Last week, influential proxy adviser Institutional Shareholder Services recommended investors vote to replace the majority of directors at Wells Fargo, including Sanger and the other three independent directors, at its April 25 annual meeting. The Justice Department, meanwhile, is investigating whether executives hid details from the company board and regulators as the problem grew over the years, people familiar with the matter have told Reuters. U.S. Attorney offices in San Francisco and Charlotte, North Carolina, are also investigating.

The report criticized the board for not centralizing the risk functions at the bank earlier, for not requesting more detailed reports from management and for not insisting Stumpf get rid of Tolstedt sooner. Tim Sloan, who replaced Stumpf as chief executive, is described in the report as having little contact with sales practices at the bank before becoming chief operating officer and Tolstedt’s boss in November 2015. Six months later he told her to step aside. Since the scandal broke, the bank has ended sales targets, changed pay incentives for branch staff, separated the role of chairman and chief executive and hired new directors to its board. A NOTEWORTHY RISK A big part of Wells Fargo’s problem was its decentralized business model, which meant the retail bank was able to keep inquiries from head office at arm’s length and there was no joined-up effort by either the bank’s human resources or legal divisions to track and analyze the scale of the problem.

Futures flat as first-quarter earnings season approaches U.S. stock index futures were little changed on Monday as investors awaited earnings from big banks later in the week, kicking off the first-quarter earnings season.

Geopolitics from France to Korea keep investors cautious LONDON Trading volumes were muted for many financial market assets on Monday with investors refraining from making big bets because of geopolitical tensions in the Middle East and the Korean peninsula.

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