Breach Of Ethics : The Case Of Wells Fargo Bank Essay

The Wells Fargo scandal involved a variety of stakeholders who have stake in the issue; however, the main stakeholders include the consumers, the employees and their families, and stockholders of the organization. The affect these stakeholders suffer varies, but the ultimate affect the scandal has had is violation of trust by Wells Fargo and its leadership. When examining this situation, the main stakeholders who suffered the greatest harm from the scandal were the customers who fell victim to the fraud and had their privacy violated by an organization they trusted. In the course text, Trevino and Nelson spoke of the importance of trust and its importance in a service economy. Wells Fargo violation of the consumers’ trust has ultimately added

The Consumer Financial Protection Bureau (“CFPB”) is tasked with writing and enforcing rules for financial entities to protect consumers from unfair, deceptive or otherwise harmful practices by such entities. A major area of focus for the CFPB is a robust and effective oversight of a financial institution’s third-party providers (vendors) to ensure consumers are not exposed to unnecessary risk of financial or personal harm.

Wells Fargo is an American multinational diversified financial services company. The company operates throughout the world. It is one of the largest banks in the US in the state of assets. Moreover, Wells Fargo is the largest market capitalization bank in the US. It takes the second category in the field of deposits, delivery of home mortgage services, and delivery of credit cards. The company has its headquarters in Francisco, California. The company has coverage of more than twenty-four states in the US. In every state, it has established its headquarters that act as distribution and storage regions for the company's products and services. The company offers insurance, banking, mortgage, and consumer financing through the sale and distribution of its networks across the US. The advantages of Wells Fargo Company are widely distributed: they have helped it realize a stable market in the United States and around the globe.

Wells Fargo has been penalized and has been fined 185 million dollars because they were opening fake accounts.

Stumpf went before the Financial Services Committee of both houses where he “insisted Wells Fargo never wanted employees to do anything unethical to meet their sales goals.” (Corkey,2016) Stumpf has quit both of his positions due to the intense coverage on the bank. He will still have his pension plan as well as money from his stock. Stumpf’s 40 million stock rewards and salary for the year, however, will be forfeited to the company. Timothy J. Slogan the chief operator has taken over as CEO with Stephen Sanger becoming board chairman. Carrie Tolstedt, the community division leader, had also stepped down; she also will not be receiving any severance or $19 million in stock (Cowley, 2016 September

Thank you for contacting us to look into whether you might be able to bring an individual claim for telephone calls you received from Wells Fargo. As this point we have to decline representing you in this matter.

This practice was so common that Wells Fargo employees had several methods for doing this. The first method is sand bagging. Sand Bagging involves failing to open accounts by customers at their requested date, instead accumulating accounts to open in the next sales period to inflate profits. Another practice was called Pinning which was creating pin numbers without customer’s authorization, and attaching them to credit cards. Then employees would impersonate customers on Wells Fargo’s computers and use these pin numbers to create online banking and bills for customers. Finally, a practice called bundling was done where Wells Fargo employees would mislead customers saying that certain banking products were only available in bundles which forced customers to add more products than they wanted.

The ethics of the bank requires that there is ethics of integrity. It is supposed to be created through a culture in the bank and it should be one of the banks priorities because this is a business and they gain the profits from the people they serve on daily basis. Even if the bank shall survive this wave of scandal is so difficult now to convince any client to join this Wells Fargo which shall cause them a lot of money. Also all the old customers may start withdrawing and looking for other banks which they feel are more secure when they are keeping the money for them. It is so hurting and distrustful for a banking instead of accruing money in the accounts of their customers what they wells was doing was that it was misusing their money and giving them extra fees.

In September of 2016, it was revealed that there was alleged misconduct at one of the largest and safest banking institutions in the United States. Wells Fargo Bank was ranked among the nation’s safest financial institutions according to an analysis done by Global Financial, (Inside Tucson Business, 2009). Alleging that between May 2011 and July 2015, there were more than 2 million bank accounts or credit cards opened for customers without their knowledge or permission (Blake, 2016). Clients started complaining the they were receiving debit/credit cards from the bank that they had not ordered. Wells Fargo employees also started complaining that about the unethical behaviors they witnessed or were asked to participate in to the Human Resource Departments, the bank’s internal ethics hotline, branch’s individual managers and supervisors. All which led to the discovery of the fraud scandal.

Wells Fargo founded in 1852 is known for being a financial services company. Wells Fargo provides banking, insurance, investment, mortgage, and consumer and commercial financial services through more than 8,600 locations, 13,000 ATM’s, online, and mobile devices. Wells Fargo is headquartered in San Francisco, California but has a vision of being decentralized from that location. Being decentralized allows each location to act as a headquarters to provide their customers with specific financial services. Wells Fargo employs approximately 268,000 employees to serve 70 million customers.

Well Fargo is currently being sued over 185 Million Dollars and 5,300 were fired for making fake account.

Hiding or divulging information: Goldman bet against their clients several times. They knew material information on certain investment; however, they never communicated that to their clients because they were making money off them.

Ethical issues have greatly transformed in our lives since the great Enron, Xerox and other huge corporations proposed big profits showing earnings of billions of dollars and yet in reality facing bankruptcy. These corporations faced great trouble with the federals and state for manipulating financial statements. But not only corporations can be blamed on this, accounting firms were involved in this as much as the corporations were. With the business stand point, ethics comprises of principles and standards that guide behavior. Investors, traders, customers, and legal system determine whether a specific action is ethical or unethical. Ethical issue is a vast subject, but we will look at the niche

There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the four I am going to focus on are listed below. Art Anderson, Ken Lay and all of the other executives did a number of unethical things which ultimately brought down Enron and affected thousands of employees and their futures. The bottom line was that each and every one of them acted out of greed for the almighty dollar.

Ethics is something that is very important to have especially in the business world. Ethics is the unwritten laws or rules defined by human nature; ethics is something people encounter as a child learning the differences between right and wrong. In 2001, Enron was the fifth largest company on the Fortune 500. Enron was also the market leader in energy production, distribution, and trading. However, Enron's unethical accounting practices have left the company in joint chapter 11 bankruptcy. This bankruptcy has caused many problems among many individuals. Enron's employees and retirees are suffering because of the bankruptcy. Wall Street and investors have taken a major downturn do to the company's unethical practices. Enron's competitors