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At large corporations the layers can get so thick upper management gets very disconnected. There is literally nothing that everybody at a corporation knows about. We were just acquired by a large company and I am constantly amazed by how disconnected some of these people are. My wife is a PR director for her third fortune 500 company. I know some juicy details that I assure you 99% of the employees are clueless about.
Exactly. When fines become an expected cost of doing business, they are no longer serving as a deterrent.
I don't think prosecuting illegal activities is the same thing as "controlled by the government".
Maybe not, but it's quite the slippery slope in my opinion. I'd just as soon, as a customer with choices, options and free will, move my money elsewhere before the government or in this case the bank decides one way or another to rectify the situation. In this case I believe both government oversight and personal action are equally as important, to be honest.
I think this is somewhat wishful thinking. I really doubt that above the regional manager level anyone gives two rips what is going on at the account level. From that point up it's mostly leverage and carry type decisions, and then you have the private trust department, and IBanking.
Sure you can move your money to another bank. And that is precisely what I would do if I were a WF customer. And I hope that is what most will do (though I doubt it will happen).
I don't think there is much of that which is going on. The way I understand it they would
Not true. Customers were charged for insufficient funds and overdraft fees after WF employees created "ghost" accounts without customer consent. Funds were transferred from original accounts to these unauthorized accounts, thus creating the fees on the original accounts.
I agree that consumers should vote with their money, but that has nothing to do with whether or not government should prosecute illegal actions. I'm hard pressed to think of a more proper role for government than enforcing our laws.
I think these fees went uncollected in the vast majority of cases. The reporting on the aspects of this might be a little light and I may have skimmed, but I don't think there was widesperead "theft" of funds such that bankers were pocketing money. This was simply ways for people to open accounts and get account opening bonuses on these ghost accounts. Whether they stayed active or not was not an issue and the amount of fees that were collected were small. The scam as it were was designed to make the WF balance sheet look stronger because they opened XXXXXX accounts in this month suggesting growth.
I guess the point I was trying to make, and what seems to be the disconnect in the conversation (mostly because I'm a complete moron when it comes to this kind of stuff) is that I don't believe the government should seek to prosecute the CEO for the collective actions of his employees. Did it happen on his watch, yes. Should the individuals who were involved in illegal activities be prosecuted? Absolutely. I think the CEO should step down, personally, but enjoy the fact that he's not being forced out by the government.
Yeah, I'm going to have to strongly agree to disagree with you on this one given my experience with how the C-suite gets reporting at one of "these banks".
We know what the revenue on these was because it was reimbursed. Somewhere between $3MM and $5MM I believe. Opening rarely used accounts is not profitable for a bank and it really wouldn't make a balance sheet look stronger.
Actually Obama didn't want her there either. There is a reason she isn't the VP. It's one of the worst kept secrets in DC that Hillary isn't really a fan. None of these corporate shills want her anywhere near the ability to do anything they are scared ####less of her.Slapdash said:
His company was cross selling at over twice the average rate of other banks. How many people need 6 accounts with one bank? Not this many and he knew it. There is no way to look at that number and not know something was up.
If thats what the solution is to this issue, then it would stand to reason that CEO compensation needs to come way down. Cant have it both ways, make the big salary and then claim you cant know everything that goes on in the company. In this particular case the CEO had to know just by the facts of the earnings calls. I agree with Warren, the justice department and the SEC need to begin a criminal investigation and hold this guy criminally responsible.
So just sweep this under the rug because it's not a big enough fraud?Political grandstanding at its best. Politicians using this as an excuse for soundbites because we are in an election year. The "fraud" involved was miniscule in macro terms, and nothing compared to prior frauds that all received slaps on the wrist. HSBC illegally laundered nearly a billion dollars of drug money, JPMorgan had "rogue" traders blow billions in a few days. Many investment banks and private investment houses helped defraud investors of billions of dollars with bad CDO's and credit default swaps and basically nothing came of it. Citi, JPM, BofA all paid BILLIONS in settlements for selling fraudulent mortgages and for improper foreclosure practices (Wells paid some fines for this too.)
But this is the one scandal that all the politicians (both Republican and Democrat) are soooo outraged about? Because less than 1% of the retail employees opened up fake checking accounts and credit cards so they could hit their quarterly bonuses?
It's really hard to say one way or the other. I do reporting all the time for the C-suite and they could get their hands on this stuff if they wanted. Did Stumpf?
Oh....that makes better sense...thanks.HereDo you have a link to the questioning? Seems weird to be asking Comey about FBI actions before he was director of the FBI
People at the regional levels make excellent low to mid 6 figure incomes and they are being axed. A lot of higher level employees are rightfully getting their walking papers. I don't disagree with the vile garbage big banks have done over the last 10-15 years. The big retail banks like Well's and BofA etc all have turned their consumer banking centers into giant widget factories. But I can tell you with the utmost certainty that they are not encouraging a culture of employees opening accounts without client consent. That is a by product of pure greed by individuals looking to hit incentives. The goals are the goals. But reaching them unethically is on the person...not the company. If they prove CEO's of these large banks are handing down executive orders to reach goals at all costs.....then Warrens ridiculous grand standing diatribe is welcomed.I viewed her comments differently. Compensation schemes that overly rewarded employees for risky/fraudulent behavior also had a large role in the mortgage crisis. Then, like now, we do not see the firms assigning responsibility or accountability to those that created these schemes or the control partners who did not catch it. Getting rid of lower level employees who were responding to incentives seems like addressing the symptom rather than the problem.
Maybe I'm missing some pieces of the response though.
You said it much better than I did. At least at the large banks where I know high-level tech managers, any of this information is available if the business/front of office wants it. If WFC didn't, well then, that's on them as well for not spending the money to implement systems. This is basic personnel and account information. We aren't talking about a complex financial instrument which might be out of their league, but basic, fundamental business information.It's really hard to say one way or the other. I do reporting all the time for the C-suite and they could get their hands on this stuff if they wanted. Did Stumpf?
Disagree. It shows that big banks are continuing to bend rules at the expense of the general public. This is more evidence for the need to regulate big banks, and renew Glass-Steagall. These suits cannot be trusted.
Former national bank regulator here, worked in-house at one of these named banks. CEOs are getting way, way, way too much credit for "what they see" in this thread.
It may be the difference in a entity that started as a broker-dealer versus one that started as a pure bank then. I'm more familiar with the former than the latter. The former definitely has access to this type of information if they want it. The B/Ds definitely can (and do) micromanage if they want to since the structures are still relatively flat.
My understanding is that when Congress did away with Glass-Steagall it allowed banks like Wells Fargo and such to enter into more speculative investments. This gave these clowns the ability to make risky investments and still have the comfort of federally guaranteed deposits. The best of both world at the expense of the general public.The Commish said:
No, it means I roll my eyes at the political outrage over a few million dollars being crowed about in an election year when the politicians have done basically nothing the last 8 years over which billions upon billions were defrauded/wasted/squandered and the global economy was almost destroyed.Johnnymac said:
That's correct...well, part of it. Putting it back would have no affect on the retail banks where this stuff happened. That was my point. It also remains to be seen that Dodd-Frank would have an impact on something like this either.
TripItUp said:
Really should have gone with "How about I give you a million beads and we settle this?"
Read that last night - unreal, if true.
Not at all unreal. It's corporate America (greed) at it's finest. It's rampant among the already rich CEO's. Once again, nothing will come from this dog and pony show. The greedy executives will slip Warren and the rest some $ behind closed doors, so to speak, and that will be the end of it.Ned said:Read that last night - unreal, if true.
I've always been skeptical about those hotlines, "anonymous" engagement surveys, etc that they force on us.
OK you got me. In my experience with a couple of dozen wf employees that is what they have said. I have not travelled the country interviewing their workforce to get to the underlying issues in every branch. You win.parasaurolophus said:
