Wells Fargo's Fake Accounting Scandal

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Recommended: An analysis of corporate governance

KOÇ UNIVERSITY
GRADUATE SCHOOL OF BUSINESS

CORPORATE GOVERNANCE

WELLS FARGO'S FAKE ACCOUNTS SCANDAL

2017 MAY

EBRU UZUNDERE

0053002

WELLS FARGO'S FAKE ACCOUNTS SCANDAL

Wells Fargo & Company is an American international banking and financial services holding company

headquartered in San Francisco, California, with "hub-quarters" throughout the country. [1] It is one of

the biggest bank not just in USA but also in the world.

The business world has been shocked by Wells Fargo’s fake account scandal in September 2016. It was

scandalous because unethical behavior was widespread within the company and thousands of

employees were secretly creating …show more content…

Wells Fargo case should be analyzed very carefully because instead of having a few individual’s

misbehaviors, we have a companywide unethical behavior. We can even say that this unethical

behavior became a culture within the company.

5300 employees were fired due to the fake account scandal, former CEO John Stumpf lost his job as

well. According to the recent news, created fake accounts were around 3.5 million for the last 15 years.

The most damage for Wells Fargo was on losing its reputation. Furthermore, Well Fargo had to return

$2.6 million in ill-gotten fees and pay $186 million in fines to the government.

When we analyze what went wrong the very first and crucial item is the pressure that employees felt

over their shoulders. Wells Fargo’s scandal revealed that employees had unacceptable, unrealistic and

overly defined goals and performance criteria. Employees become morally disengaged and less

concerned about ethics in order to fulfill the requirements. At the end employees started to perceive

these unethical behaviors as normal daily routine.

Secondly, employees’ mentality was focusing on business which causes values, ethics, morals to

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