Wells Fargo's Stellar Reputation In The Financial Industry

Wells Fargo founded in 1928 is currently one of the World’s largest financial institutions. The company had a stellar reputation in the financial industry, known to be an honest and ethical organization. Wells Fargo is under investigations and Senate Bankings to determine the level of participation of its senior leadership in creating an environment and encouraging a culture that defrauded consumers “their customers” to increase profits.
The Consumer Financial Protection Bureau (CFPB) determined that Wells Fargo and its employees were secretly opening customers, multiple accounts without their knowledge. CFPB estimated that Wells Fargo employees opened over two million fraudulent accounts. Wells Fargo was fined one hundred eighty-five million
The sales method named cross-selling is widely known in the financial industry. Cross-selling is when a bank up sales clients additional accounts. A bank representative will sign customers up for one account say savings and then offered to open up additional accounts such as checking, credit card, additional saving, mortgage and any other imaginal account. Most consumers usually have three accounts, but the Ceo Stumpf often joked that the number eight rhymed with great, so the goal was to ensure that Wells Fargo customers have eight accounts. The employees were required to keep pace with targets, but when no new clients were being established traditionally. Employees were encouraged to open fraudulent accounts without their customer's permission. Employees who were able to meet the sales quotas were rewarded for their actions. Wells Fargo profit increased through the years 2011 thru present by using this sales approach. The Bank increased pressure to produce created an environment of acceptance or ethical lapses that allow the employees to operate in a manner that did not resemble Wells Fargo Institution typically high ethical core values. There were ethical dilemmas for the employees that participated, the ones who decided to quit and the ones who were fired even before the case was exposed. Wells Fargo executives were clued that something was not adding up correctly,
He is being drilled on accountability and to what detail did the executive management know about the cross sale fraud of its customers. Senator Elizabeth Warren who heads up the committee is asking the tough questions of Stumpf concerning the financial profits of Wells Fargo during the time when the frauds were taking place. The Committee is digging into how much profit and bonuses earned by the CEO, and should he resign and give back the money received. They are also questioning whether Carrie Tolstedt who was the Senior VP directly responsible for the Branches where the frauds happened. She had quietly step down from her position and announced that she would be retiring during year-end. Ms. Tolstedt is scheduled to receive a payout of over one hundred twenty-five million dollars when she leaves and was toasted as a great leader upon her announcement. The Banking Committee has put more pressure on Wells Fargo concerning clawbacks asking that they go after Executives that have profited by the frauds, at the time only lower level employees has lost their jobs. Wells Fargo just announced that CEO Stumpf will be forfeiting forty-one million dollars in uninvested equity rewards and that MS Tolstedt has currently left the company and has forfeited nineteen million dollars in uninvested