Wells Fargo Compliance Failure

documents. Bank of America and four other banks reached a $25 billion landmark settlement with

On September 8 2016, the Consumer Financial Protection Bureau (CFBP) announced that it was taking an enforcement action against Wells Fargo Bank . Wells Fargo is a Fortune 100 company and one of the "Big Four Banks" of the United States. Investigations conducted by the Bureau revealed that employees of the bank created unauthorized deposit and credit card accounts across the country to meet sales goals. Over the years, the bank’s employees opened over 1.5 million fraudulent bank accounts and 0.5 million fake credit card accounts for customers, to meet sales targets and obtain bonuses. The affected consumers, were being harmed by the associated charges and fees for these accounts. The fees include insufficient funds or overdraft fees for the deposit accounts and annual fees for credit card accounts.

Wells Fargo had said that they open 1.4 million fake accounts but eventually it went up to 3.5 million fake accounts. Those accounts weren’t use by the customers. Wells Fargo company discovered that their employees were the reason behind the scandal by using unauthorized credit card and bank accounts from customers who wasn’t activity using them. Wells Fargo realize that this problem was dating back since the early 2000’s. Wells Fargo also had another scandal that involved 570,000 auto loan customers who were charged with insurance that they didn’t use which eventually resulted in repossessing cars of those customers. Wells Fargo was fined for 185 million dollars after Wells Fargo said that the employees had opened fake accounts. Wells

Wells Fargo had expectations that employees must have a high sale of 20 products a day. Employees have been nudged by their superiors to make fraudulent accounts to meet these unreasonable quotas. Once the scandal was known to the public, not only did it damage the trust of their clients, it seems unattractive for new workers to work there, and in the end, the company loses money through penalties and reimbursements. The goals should be (A) Refund 100% every single person affected by the fraudulent accounts and work with clients whose credit scores are likely to decrease because of it, (B) Treat employees as an asset and use positive incentives instead of quotas, and (C) Increase quality of customer service. These are communication goals for the long-term, which should be set in motion to regain trustworthiness and turn back the company name to the original status or

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.

Next they need to determine all of the employees involved in the conflict from lower level employees to executive level employees. They need to have a clear picture as to who was aware of the situation. The CEO that has since resigned was John Stumpf, “Did Stumpf’s (and other company leaders’) enthusiasm encourage employees to look for “creative” ways to install more accounts?” (Bariso, n.d.). Wells Fargo at this point should have looked at the big picture as to who was involved and not just look for a simple answer.

JP Morgan is the largest bank in the US with over $2.5 trillion in assets. The bank made it known via an SEC 8-K filing that the breach affected 76 million households and 7 million small businesses. They confirmed that contact information of customers was compromised in the breach including name, address, phone number and email addresses. They indicated that internal JP Morgan information pertaining to customers such as credit cards and various investment products, was also accessed by parties

Because of these changes, in April 2015, an intrusion that occurred before the updates was detected. With the assistance of the Department of Homeland Security and the Federal Bureau of Investigation, an investigation was initiated and revealed 4 million personnel records were breached. Also during the investigation, it was revealed in June 2015 that there was a breach of 21.5 million records related to background investigations of current, former, and prospective Federal government employees, and for those that had previously had a background investigation conducted.

Data breach of personal information can be very disturbing. Even, where the breach involves accidental and unintentional misuse of information, if the breach affects many individuals, the scale of the breach may create greater risks that the information will be misused. For example, some of the results from breach are: financial loss, identity theft, loss of employment opportunities, humiliation, and social bullying at workplace. Also, data breach can cause loss of public trust in the agency, reputational damage, losing assets, legal liability, and breach of secrecy provision in applicable legislation.

In recent news Wells Fargo bank has been under a lot of scrutiny regarding unethical business practice. Wells Fargo & Company, is one of the nation's largest financial banking service company that provides

The much anticipated Chief Compliance Officer (CCO) scrutiny in 2016 and possible enforcement action could spell changes for institutional investors, a report by Hazel Bradford of Pionline.com indicates. The changes are going to happen because institutional investors will be closely monitored by compliance experts. Compliance officer typically help organizations identifying risks and formulate response. Regulatory organizations such as the New York based Regulatory Fundamentals Group LLC, is determined to assist organizations to articulate their expectations and correct failures to meet the expectations.

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

JP Morgan is the largest multinational bank in America having a total of 2.6 trillion American dollars and is considered as the major provider of financial services to both the government as well as private sectors. Along with that according to the Forbes magazine it is the third largest public based company in the world. The bank got it self in real trouble when two of the government sponsored mortgage finance companies Fannie Mae and Freddie Mac along with EMC Mortgage Corporation bought mortgages from the Jp Morgan bank for giving out loans to the people. Thus they EMC Corporation also started to package it into complex residential mortgage securities which were bought by the investors around the globe (Krieger, 2014).

The analysis of 2,260 breaches and more than 100,000 incidents at 67 organizations in 82 countries shows that organizations are still failing to address basic issues and well-known attack methods. The (DBIR, 2016) shows, for example, that nearly two-thirds of confirmed data breaches involved using weak, default or stolen passwords. Also shows that most attacks exploit known vulnerabilities that organizations have never patched, despite patches being available for months – or even years – with the top 10 known vulnerabilities accounting for 85% of successful exploit “Organizations should be investing in training to help employees know what they should and shouldn’t be doing, and