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Countrywide Financial was a mortgage-banking firm. They had one of the largest market shares in the early 2000s, when the mortgage market was booming. “No company pursued growth in home loans more aggressively than Countrywide” (NY Times 12/10). They were the leader of their industry, with 500 billion in home loans, 62,000 employees, 900 offices, and $200 billion in assets. Everything had been going well for the company and its employees, until the mortgage crisis began to unfold at the end of 2006. In June 2009, the SEC filed a civil suit against the founder of the business and some of his top management for fraud and insider trading. This came at the height of the mortgage crisis in the US. The founder of Countrywide, Angelo Mozilo, finally agreed to pay $45million in profits and $22.5 million in civil penalties, in which he still admits no wrongdoing.…
The article reported how representatives at Wells Fargo received false strategies to accomplish the sky-scratching deals targets, including the opening of unapproved and…
The auditors should have raised concerns over several fraud risk factors that were present. There was a perceived ethical disconnect between JP Morgan’s Code of Conduct and the “tone at the top” that upper management created. Jamie Dimon built an environment that allowed employees to do practically anything to achieve more impressive earnings. A special group was permitted to function outside the established business standards. According to Spoehr (2012), this group included individuals with strong personalities and significant clout, and these employees were excluded from ordinary review, oversight, and approval practices in place.…
Many organizations and companies are or have been highlighted negatively in the media for their greed and unethical behaviors. “In recent years, the media spotlight has focused on serious ethical lapses in every type of organization—business, government, educational, religious, sports, and others. We’ve all heard about senior managers who line their pockets at employees’ expense, auditors who overlook serious accounting problems, investment analysts who sell stocks they know to be in trouble, insider traders, businesses that overcharge the government, government employees who steal or misuse funds, academics who falsify their research results,…
One of Wells Fargo’s factors to success has been their cautiousness to risk. Leading up to the financial crisis of 2008, Wells Fargo did not overindulge in the mortgage bubble before the housing market failed. As a result, they did not lose billions of dollars and were able to acquire Wachovia, a financial services company. Although Wells Fargo was wise with their risk, their competitors, Bank of America and Citigroup, suffered extreme losses. The same situation also happened in 1990 during the commercial…
Primarily, the main reason for prodigious differentiation between New England and the Chesapeake region at the start of their existence was the separate intentions of the leaders of the two. The reasons why these colonists traveled to America led to the development of two different societies from the colonial period up until 1700. Factors sprouting from these intentions include social factors, political factors, and economic factors. These factors and motives are the basis of the two different lifestyles of people who were once, and would eventually be, of the same culture; of the same civilization.…
In 2016 one of the biggest financial scandals occurred with one of the major banks in the United States of America. Wells Fargo employees engaged in serious unethical behavior throughout the year of 2016. An uncountable amount of Wells Fargo employees created over two million fraudulent accounts for customers who had no idea. The customers did not know accounts were being opened nor authorized the openings of these accounts. Employees at the Community banking level of Wells Fargo felt pressured into adding more accounts for already existing members. The pressure for added accounts came from higher…
Companies analyze their strength and weakness to evaluate and project how they can improve or make profit in the coming years. So some companies will go through financial leverage by using debt to acquire additional assets as Wells Fargo did in acquiring Wachovia according to San Francisco & Charlotte, N.C (Business Wire 2008). Wells Fargo acquired all outstanding shares of common stock of Wachovia in stock-for-stock transaction, including preferred equity and indebtedness. They did this to expand their business in other states and cities. Other companies will sell shares, stock and use other means with the exception of acquiring debt to raise money.…
JPMorgan Chase is one of the oldest and most respected banks in the United States. However, during the summer of 2012 Chase announced trading losses and bad investment decisions that resulted in a loss of approximately $5.8 billion. Not only did they report this substantial loss they admitted to falsifying their first quarter reports, were they where attempting to conceal the massive loss. Three months prior to this event JPMorgan Chase was viewed as the top American bank. The first question to be discussed in this paper will be what actions can Administrative Agencies such the Securities and Exchange Commission (SEC) and…
The company Wells, Fargo & Co. is known for its banking and mail delivery services in the Old West, and today, is an extremely successful bank. Wells, Fargo, & Co. had paths on which they would go on to deliver mail from one place to another across America. In 1858, Wells Fargo’s stagecoaches delivered mail from texas to california (Wells Fargo 5).…
During the years 2009 thru 2015, Wells Fargo has had to participate and defended a plethora of legal issues that were filed against them or their subsidiaries. Throughout these years Wells Fargo was involved in a total of 28 different legal issues. Many of the lawsuits main contributor were Wachovia. These legal issues ranged from violations to bankruptcy laws, wrongful termination to contracts, documents containing untrue statements, targeting and steering minorities into high-cost mortgages, additional mortgage lawsuits, breach of contract with Visa/Master…
According to Norm Bowie, “sometimes being moral enhances the bottom line rather than reduces it” (Hartman, 2005, p108). Unfortunately, in the instances of Penn Square Bank and the Dow Corning bankruptcy, that may not have been the case. The following will examine the particulars of these situations and discuss the ethical issues present for each. Penn Square Bank…
In a nutshell, the company has been accused of setting unrealistic sells goals for their associates. The quotes, set by the corporation are so high that it has triggered unethical business strategies from the employee population. According to zacks.com, “Wells Fargo adopted fraudulent tactics to achieve the sky-scraping sales targets, including the opening of unauthorized and unnecessary accounts, and issuing illegal cards (Wells Fargo Faces LA Lawsuit for Unethical Conduct. n.d.).” The article went on further to address some of the possible reasons why workers would violet the ethical code of conduct at Wells Fargo. A very competitive banking industry and increasingly low interest rates are a few reasons mentioned in the…
Another significant event in Wells Fargo history is in 1981 a Wells Fargo employee, specifically a Wells Fargo Operating officer, embezzled $21.3 million, which was reported the largest embezzlement ever. The employees plead guilty to writing phony debit and credit receipts to his friend’s accounts, while receiving a $300,000 cut.…
The Wells Fargo Bank’s stock price was climbing higher and higher in that period. The lawmakers began to wonder why this was happening so drastically. Also people were receiving credit cards and bank statements in the mail that they never signed up for. The court brought them on falsely creating account according to this article, “A search warrant released Wednesday by the state Department of Justice shows that agents sought evidence related to allegations that bank employees created up to 2 million bank and credit card accounts without customers' approval in order to meet sales goals.” This lead lawmakers to bringing the Wells Fargo Bank all the way up to the Supreme Court. Where they had put new…