Like any other firm Wells Fargo had come up with a systems which worked as an incentive to its employees so that they could work harder. This system was rewarded as a cross selling which made that each employee who made to sell more than one service to a customer were given a bonus (Reuters, 2016). Cross selling is a lingo for selling more than one product to the same customer. This meant that a customer would be given a mortgage, a home equity loan and a credit card after the opening the different accounts. The employees of Wells Fargo earned a lot of bonuses from this method of cross selling. Opening of new accounts for the employees without their consent was unacceptable, unethical and illegal in terms in accordance to the laws which are governing the banking sectors (Reuters, 2016). This was a wider cultural cancer which had …show more content…
It was after her retirement when the bank came to understand that their bank was under inspection for the last one year. This scrutiny was due to the banks tactics of selling their products. She had been working in the bank for the last 27 years in charge of a senior position and it was no doubt that she was so conversant with the culture and the ethics of the bank (Higgins, 2015). Though she retired quietly from the bank she is still remaining employed in the bank until the end of the year and is expected to gain at $125 million in terms of stock and other options as a way of rewarding her at the end of her term and this shall be a token for her seniority and longevity in the bank. With all the reward there was nobody who was able to account for the service whether it was worthy the payment or was is it just an extra expense to the bank. After the scandal her compensation was supposed to be withdrawn of which it is not clear whether the bank has done
This case is based on Mrs. Jennifer Sharkey, who sued J.P. Morgan & Co. (JCMC), Mr. Kenny, Mr. Green, and Mrs. Lassiter, alleging breach of contract and violations of the SOX anti-retaliation statute. The facts started when Mrs. Sharkey was assigned to a Suspect Client 's account where members of JPMC expressed to her their concern regarding to this account because they suspected that the Suspect Client was involved in illegal activities. After Mrs. Sharkey’s investigation, she claimed that she informed her conclusions to superiors Mr. Kenny, Mr. Green, and Mrs. Lassiter, of the Suspect Client 's potential unlawful activities, such as: money laundering, mail fraud, bank engaged in fraud, and violations of federal securities laws. After
The company promotes an aggressive strategy that they believe is the basis to accomplish their vision. Also incorporating a successful business model and a plan of execution to tie together the general strategy for Wells Fargo. The company values their customers above all else, wanting to gain their trust and deepen relationships with each and every one of them. Along with their extensive community involvement, Wells Fargo has other strengths that have helped them become so successful. The explosion of the bank began in San Francisco and soon expanded nationwide. Eventually, Wells Fargo developed into an international company. They provide multiple different networks that help attract potential customers to their company by having a service that can apply to everyone. Another strength that the company has executed would be the art of cross-selling. When it is finalized legally, it can be a great attribute to the company and the customer by letting them access the new services Wells Fargo provides. However, if there are strengths the weaknesses will follow in a major corporation. Wells Fargo has an international basis, it is very narrow in
Wells Fargo account fraud scandal One of the most recent white-collar crimes involved Wells Fargo, a banking and financial services provider. In 2016, San Francisco-based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo is involved in paying $185 million in fines and refunding $5 million to affected customers.
The film Enron: The Smartest Guys in the Room was a great film loaded with examples of unethical behavior with Enron being an unethical corporate culture. The film portrays the rise and fall of Enron, one of the most corrupted corporations this country has seen. Enron had started off as a promising energy company with a vision to do good which quickly turned sour when top executives torn the company down while stealing millions of dollars from people. A reason for the downfall of Enron was the deregulation of electrical power markets which fueled the greed of Enron’s officials. They were the ones that transformed Enron from a traditional energy company into an energy broker.
Although many of her actions were parallel with fellow manager in General Accounting Troy Nordmand’s, he did not receive a prison sentence due to the fact that he attempted to leave the company (although Vinson did initially plan to resign). Conversely, Vinson was sentenced to five months in prison and five months of home detention. One particularly interesting aspect of Betty Vinson’s case is the inclusion of her concerns over taking home pay and having health insurance, in addition to the fact that she had a positive reputation and was known for doing “anything you told her”. While it is normal to have concerns over job security, the emotional appeals in her situation add a different side to the story. One could argue that she is a victim -- she could have been targeted due to her reputation, or that fear drove her to do things she otherwise would not have considered. The issue here, however, is that she facilitated the fulfillment of Sullivan’s requests and pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud. As far as the case specifies, despite any superior’s knowledge of Vinson’s tendencies, she was not absolutely forced to do or not do anything. Because she committed the crime and pleaded accordingly, the criminal charges and consequent sentencing was both expected and
As Wells Fargo convicted all the requirements of fraud they are involved to the business crime called fraud, they are liable to their fraud crime. There was a false statement which respectively conducted to the injury to the alleged victim as a result. Wells Fargo has been ordered to pay $185 million in fines, but that's a pittance compared with the $5.6 billion the bank earned in just the second quarter of this year. Meanwhile, the bank's victims weren't just nickel-and-dimed with overdraft and maintenance fees. Many of them took "significant hits" to their credit scores for not staying current on accounts they did not even know about. They will likely have difficulty securing home and car loans at reasonable rates for years to come, simply because their bank decided to defraud
The management team mistakes were setting up unreachable goals for the employees, as a consequence they started conducting unethical decisions and transactions, such as opening “false accounts” and requesting friends and family members open accounts. , therefore employees could keep their jobs.
Wells Fargo believes in the importance of obtaining all of the customers business and strives to provide them with choices. Consumers living in a foreign country can work closely with international personal bankers who have been trained and are available for helping with worldwide needs. Services offered are traditional Wells Fargo products as well as those specifically designed for those living abroad. Wells Fargo also accommodates foreign companies doing business in the United States. There are also many foreign banks and their customers who benefit from what the international business products that Wells Fargo has to offer. Special products have been designed for international business use for both consumer and business customers. Top level executives and store managers collaborate regularly to promote product ideas to help make accommodate any financial needs to the international customers.
In this paper I will identify and analyze the Wells Fargo scandal as it pertains to the breakdown of leadership and ethics. I will first identify and analyze the event and discuss the challenges and conflicts the scandal presented. Then I will evaluate the issue by explaining why the issue has interest and concern to stakeholders followed by discussing the challenges presented to individuals and/or organizations around this case. Lastly, I will recommend action steps that should be taken to those involved as well as discuss what I have learned from exploring this topic.
Wells Fargo was recently fined for employees opening accounts without the customer's knowledge. It was a classic reputation management crisis, deserving of a solid reputation management
While Wells Fargo is doing very well and growing financially, it is important to keep in mind how the public sees them. It is necessary for them to keep obtaining new customers, and to continue to create an ethical culture among the employees. It is important for them to not slip back into their old routine, and not become too obsessed with opening new accounts. It is very appropriate that they are shifting their goals toward customer satisfaction in order to please existing and new customers. Overall, Wells Fargo has been fortunate, and has handled the scandal with
This involved sacking of all the employees who had involved themselves in the scam and ensuring that they faced the full force of the law as it is required under the law. A back with such kind of reputation to be implicated in a huge scandal like the one it was involved cannot be looked upon lightly. The news posts suggest that such acts and those who were involved should not be left to go scot free as they have gained a lot from the scandal. The news post also questions the code of ethics in operation in the bank. Ideally, bank staffs are supposed to observe high levels of disciplines especially when the customers are involved. The employees’ actions were a manifestation of how weak the code of conduct with which the bank is applying is and therefore needs a lot of
...he black in financial statements, they need to work on their strategic plans and controls. They need to deal with their mortgages more ethically and more responsibly. Instead of owning the ignorance of their own customers, they should be more communicative towards them. This will also save them a lot of money on lawsuits and attorney fees. My other opinion as well is that they need to continue in whatever they are doing to be innovative. As history has shown, they are innovative from the beginning. Since they have opened in the 19th century, Wells Fargo has been open to new ways to make business. For example, Wells Fargo has started with a simple mission as delivering new services such as the pony express to now with online banking and mobile deposits. In the next chapter of this capstone research paper, we will discuss recommendations for Wells Fargo stay on top.
Due to such lack of monitoring, management continued to be unaware of such transactions that continued to impact the company negatively. This provided the Rigas family many opportunities to override controls since the lack of corporate governance enabled the decisions to be made by Rigas family without oversight. For example, the article “Adelphia Officials are Arrested, Charged with ‘Massive’ Fraud” discuses how Timothy Rigas had to limit himself to $1 million a month of compensation that was withdrawn from the company for personal use. All decisions were continuously made by such members of the family, in which case for Adelphia, was the team of management. With the lack of controls creating opportunity, they were free to do what they wished- which is something they took incredible advantage
Through an organizational culture that focused on financial greed for self, illegal accounting practices, conflicts of interest partnerships, illegal business dealings, fraud, negligence, and massive corruption at all levels, the Enron scandal help to create new laws and regulations with stiff penalties if violated (Ferrell, et al, 2013). The federal government implemented the Sarbanes Oxley Act (SOX) (Ferrell, et al, 2013).