Rhode Island's retirement system, which holds more than 143,000 shares of Wells Fargo stock, joined a group of institutional investors filing a shareholder proposal demanding the bank address its fake-accounts scandal.
"Wells Fargo allowed millions of Americans to fall victim to widespread fraud and the full extent of the damage to their customers, employees, and shareholders is still unknown," Rhode Island General Treasurer Seth Magaziner said in a statement announcing the action Thursday. "On behalf of Rhode Island taxpayers and members of the state's pension system, we are entitled to know what Wells Fargo allowed to happen and what steps they are taking to ensure that it can never happen again."
Rhode Island joined a coalition of investors, including the Sisters of St. Francis of Philadelphia and members of the Interfaith Center on Corporate Responsibility in co-filing a shareholder proposal requesting that Wells Fargo issue a comprehensive, public report on "the root causes of the fraudulent activity and steps taken to improve risk management and steps taken to improve risk management and control processes."
A message seeking comment was left with Wells Fargo representatives.
Several state and municipal issuers have sanctioned Wells Fargo after revelations that thousands of bank employees opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for employees and managers.
Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau two months ago and chief executive John Stumpf resigned. Pennsylvania, California, Massachusetts, Ohio, Chicago and Northern California's East Bay Municipal Utility District have sanctioned the bank.
New York City officials said they might cancel business with Wells Fargo, while the Metropolitan Transportation Authority, whose operations include the New York subway system, left Wells Fargo Securities off its senior managing rotation list pending an internal investigation.
"The Employees' Retirement System of Rhode Island believes that economic and financial prosperity are rooted in ethical businesses practices," Magaziner wrote Wells Fargo. "A full accounting of the root causes of widespread fraudulent activity at the company and a clear plan for corrective action going forward will go a long way toward rebuilding trust and increasing shareholder value."
Wells shares were trading at $52.62 at midday Thursday.
