Case Study: Wells Fargo Fake Scanda

The Divide by Matt Taibbi In The Divide, it covers the major differences between the very high wealthy and the lower class. HSBC is the first thing that the book starts discussing. The company admitted to stealing around seven billion dollars.

(2)Since 2011, Wells Fargo’s employees have been secretly creating millions of unauthorized bank and credit card accounts, and some Wells Fargo employees even created fake Personal Identification Numbers (PIN) as well as fake email addresses to give the illusion of a growing customer base. The fake accounts earned the bank unwarranted excess fees, which led to increased sales figures. Everyone who had a legit account with Wells Fargo and the people who owned stocks in Wells Fargo were affected. Richard Cordray, director of the Consumer Financial Protection Bureau said, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses" (Cordray, 2016). The unethical behavior led to the termination of about 5,300 employees, and eventually Wells Fargo had to pay over $185 million dollars in fines, plus an additional $5 million to each affected customer.

According to various media sources, since 2011, employees (managers, bank managers and case managers) created millions of unauthorized card and bank accounts for their customers. In his interview, former employee Khalid Taha, banker, said “he fielded complaints from customers about questionable accounts until shortly before he left the bank this summer.” He also mentioned that at a 2014 ethics workshop in California, the topic of creaking fake customer counts was discussed and they were warned not to do so. Several former employees spoke of the pressure management placed on them to make sales and if they didn’t meet their quota they were faced with being written up or fired. Due to this

then Chairman and CEO, announced that he would be retiring amidst the controversies involving his

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.

Throughout the years Wells Fargo has made sure that they never dismissed their focus on helping customers and organizations in the real economy. All the way from checking accounts and debit cards to preserving merchandise to treasury administrations, they help customers deal with their day by day financial lives. Wells Fargo are able to help families purchase their first homes and cars. They also provide financial assets to small and large businesses across the country, which it provides an expansion for new hire. They also assure to help their customers plan and save for retirement. Wells Fargo make sure that they stay supported and stand firm with the local communities. This is mainly known as “Main Street Center”. Customers trust that

Wells Fargo provides banking as well as financial services to its customers. It is an American firm based out of San Francisco and provides services across the globe. The bank’s main primary subsidiary which operates in US is Wells Fargo NA. The main office of Wells Fargo NA is in Sioux Falls in South Dakota.

It serves approximately 80% of the U.S. population with about 57 million consumer and small business relationships. Most recently, the corporation had assets totaling approximately $2.1 trillion with over 280,000 full time employees. There are six banking segments in which the corporation operates: Deposits; Card Services; Consumer Real Estate Services (CRES); Global Commercial Banking; Global Banking and Markets (GBAM); and Global Wealth & Investment Management (GWIM). The corporation’s global presence in corporate and investment banking and trading across a broad range of assets serves governments, institutions, individuals and corporations.

Wells Fargo has not been held accountable for the damages of their customers or employees. They are yet to admit or deny the accusations but has refunded the money to their customers and paid the fine. They have left many employees without jobs and no one has been taken into custody for laws they broke. The executives of Wells Fargo will keep their bonuses and leave with $25 million dollars. This company has lost trust from their customers and damaged their reputation. What will be next for Wells Fargo and banking in

As per this, set of working responsibilities are refreshed consistently. Here, nobody is the boss and authority is dispersed to groups and roles where decisions are taken locally. Besides, the standards are straightforward and everybody is bound upon similar principles whether it is the CEO or another

the bank agreed to pay a $258 million fine for violating US sanctions laws. In June it failed a US regulatory stress test” designed to

As Julie Ragatz, the director of Ethics in Financial Services at the American College of Financial Services said, “ If 5,000 people were engaged in it, how many do you think knew?” (White, 2016). Reaching higher goals and increasing revenue is great; however, if unrealistic standards are set, employees are forced to meet those standards at any cost. Jeb Hensarling said, “Fraud is fraud. Theft is theft, and what happened at Wells Fargo over the course of many years cannot be described any other way” (Blake, 2016). In other words, what happened at Wells Fargo is a combination of both fraud and theft, and no other alternative explanation for these actions would be able to classify it as

Wells Fargo & Co. is a diversified financial services company in the United States with consumer finance subsidiaries doing business in Canada and Puerto Rico.

It is important to mention that the acquisition of Wachovia allowed Wells Fargo to reach more customers from the East Coast by providing a large retail banking network. As per Robert K. Steel, former President and CEO of Wachovia Corp, stated back in 2008, this agreement “creates one of the strongest financial firms in the world” and it was well received by all Wachovia stakeholders (The New York Times, 2008).

5,300 low-level employees were dismissed while the CEO, John Stumpf, who accumulated $137.1 million in company stock while the scam was ongoing, left the bank and walked away scot-free. (Merie, 2016)