Cheating pays … Just ask Wells Fargo execs

What’s up with Wells Fargo’s CEO? According to the N.Y. Times, “Wells Fargo was flowing with regrets …, taking out ads in nearly a dozen newspapers saying the bank took ‘full responsibility’ for creating sham bank accounts without its customers’ permission. * * * But with its banking regulators, Wells Fargo was not as contrite. The bank agreed to pay $185 million in fines and hire an independent consultant to review its sales practices, but it was able to settle the investigation into the questionable accounts without officially admitting to any of the suspected misconduct.” It gets worse. Adam Davidson wrote up this analysis of the Wells Fargo scandal in The New Yorker. Here is his conclusion: “There is no evidence that John G. Stumpf, the C.E.O. of Wells Fargo, was involved in the scheme to defraud the bank’s customers. [But] If bank regulation were doing its job—if he’d feared a job-threatening fine—he would have had the incentive to find out about it and stop it. What price has Stumpf paid for failing to monitor his bank? Remember: early signs of this scandal were covered in 2011, and then widely revealed in 2013. That year, Stumpf won the Euromoney Banker of the Year award. Last year, Stumpf was named Morningstar’s C.E.O. of the Year, and made nearly twenty million dollars. This year, he was reappointed to the prestigious Federal Advisory Council, a group of twelve bankers who are trusted to give guidance to the Federal Reserve Board of Governors. The Federal Reserve, of course, is the nation’s leading bank regulator.”

Too Big To Jail

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
This entry was posted in Cheating, Current Affairs, Deception, Ethics, Law. Bookmark the permalink.

2 Responses to Cheating pays … Just ask Wells Fargo execs

  1. Craig says:

    Not just Wells Fargo. Cheating pays everywhere there is a buck to be made by passing along someone else’s buck. One of the most sickening things to me is the life-insurance incentive scams. Here’s one: — every year this company (more like a pyramid scheme than a company, actually) gives its top “producers” some trip to a tropical vacation. Based on sales, not on customer satisfaction. Push, push, push.

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