Wells Fargo CFO Howard Atkin informed people last week that he was resigning from the firm, in announcement that employees and regulators apparently did not see coming (even hours prior, senior executives were said to be "aware" of Atkins' plan). Today Chris Whalen has a theory.
Whalen, analyst at Institutional Risk Analytics and a frequent critic of the largest U.S. banks, downgraded Wells Fargo to "negative" from "neutral" in a sharply-worded four page report that was highly critical of the bank's disclosure practices. "The departure of Atkins, we are led to believe, was not merely the result of personal issues, but reflects an ongoing internal dispute within [Wells Fargo's] executive suite regarding the bank's disclosure," he writes.
Whalen then goes on to argue that Wells Fargo's "public behavior suggests significant problems in the bank's internal systems and controls as defined by the Sarbanes-Oxley law. We further understand that some officials of [Wells Fargo], increasingly uncomfortable with the bank's aggressive public disclosure regime, have reached out to regulators because of concerns regarding accounting issues."
So, there's that.