Wells Fargo Scandal

Wells Fargo Scandal
Introduction
Wells Fargo had come under fire the in last few years for creating fraudulent accounts for their
clients without their permission. The blame was given to the unreachable quotas for the employees.
This scandal has created damages to the name of Wells Fargo. The public perception of this
company is seen as untrustworthy. I want to propose ideas that may help improvements to your
employee's service and regain obtain trust from your clients and employees.
Problem. In September of 2016, Wells Fargo's scandal was displayed to the public. On Wikipedia,
the web page named "Wells Fargo account fraud scandal" states that employees of Wells Fargo had
created about 3,500,000 fraudulent accounts, including checking accounts and pre–approved ...
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Kasperkevic noted that a former employee had stated that she did not know how it was possible to
sell 20 products a day within an eight–hour day of work. It was difficult to sell more than one
product, which took about an hour for each customer. Employees were extremely stressed out to the
point that they were nudged to make fraudulent accounts. Kasperkevic also states that penalties
accepted from the company totaled to 185 million dollars. It was a necessary choice for the higher–
ups to eliminate quotas. The positive incentive should be applied to all Wells Fargo's. An incentive
for winning a bonus with x amount of money for selling the most products in the month. Employees
are motivated to receive a bonus, instead of meeting an expectation with their job on the line.
Making employees feel less that they are replaceable and more of value to the company. Due to the
bad publicity, potential hires will be disinterested in joining Wells Fargo. If the company expresses
value for their workers, it would look more attractive for more people to apply for the
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Swot Analysis For Wells Fargo
Situation Analysis
In this first section of the Social Media Plan for Wells Fargo, it will discuss the internal and external
environments of the company, this will also include a SWOT analysis. Following this analysis, the
corporate objectives for social media will be discussed as well as the target market analysis.
Internal Environment Since 1852, when Henry Wells and William Fargo founded the company, it
has always had the main focus on its customers. Originally, the idea set aside this financial
institution from the rest was the determination with the Pony Express and the classic stagecoaches to
allow express banking. "Wells Fargo earned a reputation of trust by dealing rapidly and responsibly
with people's money" (Wells Fargo, 2017). The bank began to grow rapidly throughout the years and
took on the motto "Ocean to Ocean", it was a this time the stagecoaches began traveling miles and
miles in order to deliver their customers banking needs in a timely manner. However, by the time the
Great Depression hit, the bank unfortunately lost all their business and resorted back to their original
stomping grounds in San Francisco. It wasn't until during this time, the Wells Fargo stagecoach
became a symbolic icon in the Hollywood western films. By taking on this credibility in the films, it
provided a leverage for the company to come back and take back their "Ocean to Ocean" title. "New
banking concepts not only changed where people banked, but how they banked. Drive–up tellers,

Wells Fargo Case Summary
In "Wells Fargo Pays $1 Billion to Federal Regulators" article, the author wanted to tell that the
bank Wells Fargo forced to the customers to pay the mortgage interest and they also forced
customers to buy the unnecessary auto insurance policy. Moreover, Wells Fargo also creates fake
accounts in customers' name. For these several unlawful acts, this bank has been charged multiple
times by Federal Regulators. There are 100 open investigations under this bank name.
Consumers were required to pay the interest rate for the delay of the mortgage applications even
though Wells Fargo was liable for that. "Wells Fargo should have absorbed those fees, regulators
said" (The New York Times). Moreover, "whoever bought cars with loans from Wells Fargo" (The
New York Times) were also enforced to buy unwanted insurance policies which has a premium of
$1,000 a year. Almost $1.5 billion in penalties had been charged against Wells Fargo by State and
federal ... Show more content on Helpwriting.net ...
Banks also involved in international banking through the foreign exchange market. By trading in
these markets banks often can reduce their risk. So wells Fargo bank can reduce their risk by
involving in this trading. The Lack of control in management are the main responsible of these kind
unethical acts. Wells Fargo should take a useful action against their employees, not only firing them,
but also control and giving well training about the customer service and above all banking. They
should train professionally, which means besides the business employees should take decision
ethically. Because "a business mindset leads to dishonesty and lack of consideration for other things
like moral issues"

Ethical Dilemmas In Wells Fargo
Neither Wells Fargo employees nor board followed many of the stated ethical values. The
compensation plan was a large promoter of the unethical behavior. Wells Fargo rewarded employees
for providing unknown services the customer did not know about nor needed. These actions were in
direct conflict with the ethical values of "Value and reward open, honest, two–way communication",
"Avoid any actual or perceived conflict of interest" and "Comply with the letter and the spirit of the
law" (Ferrell, et al, 2013, p.184). Wells Fargo over the last few months has been in the news for
deceiving their stakeholders. Their customers were provided services in which the customer did not
even know anything about. How does this show the ethical value of open and honest
communication. Management is accountable for the ethics of all employees, however where was the
board of directors while these unethical behavior was being conducted (CNN Wire, ... Show more
content on Helpwriting.net ...
However, the customer did not know about some of the services being provided because the
financial advisor would not reveal the services being charged. A particular service was insurance on
the vehicle a customer was financing even though the customer had their own insurance. This action
alone cost Wells Fargo over $200 million in a settlement to over 800,000 customers for the
insurance fraud (Goldfarb, 2017). Wells Fargo has not lived up to the management's ethical values
stated for the organization to follow. The CEO and board chairman has not led by example because
their salary and bonus was depending on the amount of services provided. Wells Fargo, after being
in the public media, has begun to change out their leadership group to gain back public perception
(Goldfarb, 2017). Wells Fargo has good values stated, but management must create a culture of
following these values before the culture will change.

Wells Fargo Summary
The management at wells Fargo relied on compliance as a strategy for managing its ethics
(YouTube, 2018). The management set standards that employees were expected to meet. For
instance one employee reports that in the line of work she realized that she was unable to meet the
set goal. She decided to call the banks ethics hotline to explain to the management that there was no
ethical way of making such huge sales (Cowley, 2018). The management at Wells Fargo was using
the low–level employees to open accounts without informing the customers (YouTube, 2018).
Although the management says that these was not the company's culture as reported by the
employees. The same workers who were engaging in opening more accounts were working in the
same roof

History Of Wells Fargo
History
Wells Fargo provides banking as well as financial services to its customers. It is an American firm
based out of San Francisco and provides services across the globe. The bank's main primary
subsidiary which operates in US is Wells Fargo NA. The main office of Wells Fargo NA is in Sioux
Falls in South Dakota.
Wells Fargo has the market capitalization among the American banks. In terms of assets it is the
fourth largest bank. It provides services like commercial banking, residential mortgage, consumer
lending, accepts deposits, wealth management and also provide brokerage services.
Currently Wells Fargo is at the top of commercial real estate origination, middle market commercial
lending, mortgage origination, mortgage servicing portfolio, ... Show more content on
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He was also regional director for Citicorp Mortgage. Citibank–Arizona became part of Norwest
Corporation in 1993. Thereafter he joined the Wells Fargo group. He was the part of the Federal
Reserve Board Consumer Advisory Council. Rhein has a Bachelor's degree in Psychology from the
University of Illinois, and an MBA from the University of Chicago.
Historical Stock Prices
Following chart shows the historical chart performance of Wells Fargo over the past five years.
There are other esteemed members in the management of the Wells Fargo. All the top management
have years of experience have seen various cycles of the economic growth and slowdown. They
have witnessed many economic crashes as well the economic growth period. Thus they bring with
them vast experience and thus this helps in the prudent decision making of the firm. Other members
are also on the board of other firms showcasing that the management decisions are well revered in
the industry.
Thus Wells Fargo has a strong organizational structure and a strong management team which helps
the firm making good decisions and as a result the firm has been able to perform so well in the past.
Financial Overview
Following table gives a much clearer financial overview of the firm for

Wells Fargo Unethical Actions: The Case Of Wells Fargo
Unethical Actions There are lots of Unethical Actions that occur in a company. In September 2016,
Wells Fargo was involved in a scandal that involved over 5,000 employees had made fake accounts
and were eventually fired. There are 269,100 employees in the Wells Fargo organization, 2%, which
is 5,300employees of the organization were let go. The Wells Fargo scandal had started in January
of 2009 to September of 2016 and more fake accounts are still being made by Wells Fargo. There
was so many employees involved in this scandal, therefore making it really bad for the company
Wells Fargo. One of the reasons why the employees were fired from the scandal was because the
people were feeling pressured to meet hard to reach performance goals. As the employees felt more
anxiety, their ethical behavior became ... Show more content on Helpwriting.net ...
The company had to pay $185 million in penalties and pay back nearly five million dollars to
customers for cheating. After the incident had occurred, the CEO of Wells Fargo John G. Stumpf
had stepped down. The owner also takes blame for the people who created the fake accounts and
also takes the responsibility for the actions of those people. Timothy J. Sloan took Stumpf's place as
the CEO. The scandal for the Wells Fargo fake accounts is still ongoing today. The company plans
to close 400 branches of Wells Fargo by the end of 2018. As of now, Wells Fargo has 263,800
employees in the organization. Over 3 million accounts were affected when the fake accounts were
made. That means that over 3 million identities were stolen from the scandal. Nearly 2 million credit
card and checking were opened from the scandal and nearly all money was gone, when they had
found out about the scandal. This scandal is one of the most tragic things to happen and we need
people to put a stop to

Wells Fargo Ethical Issues
The article "Wells Fargo leadership under scrutiny as review dredges up more issues" written by
Valerie Bolden–Barrett. Is about how the Wells Fargo saga uncovered 1.4 million more fake credit
cards and bank accounts in customers' names, creating the total number to 3.5 million. Also, they
charged a total of 800,000 customers insurances that they did not need when they took loans to buy
automobiles. Last year, the bank agreed to pay $185 million dollars to reconcile accusations that it
encouraged employees to open the unauthorized accounts to meet sales quotas. But now Well Fargo
will be required to pay $6 million to customers in refunds. Moreover, ethics scandals not only
generate bad headlines, but they have a direct impact on employees and on a company's ability to
attract and retain talent. Besides, an ethical organization starts with accountable leadership.
Controlled by the human recourses other high–level executives must set a high moral code of
honesty and trustworthiness to which they hold themselves and everyone in their organizations
accountable. Leaders of ethical organizations also set internal rules of conduct, such as restrictions
on email content and the appropriate use of social ... Show more content on Helpwriting.net ...
25). It can be difficult for a company to follow the ethical values, but their must be aware that not
following the ethical values can become costly, and it might affect the company reputation.
Regarding the article, the Well Fargo Staffs was more focus in opening bank accounts and adding
unnecessary insurance to meet sales quotas. They basically did not care about their costumers. Wells
Fargo is not an ethical organization anymore; after this scandal, it will be difficult for customers to
have trust in these types of

Wells Fargo Scandal
Wells Fargo had said that they open 1.4 million fake accounts but eventually it went up to 3.5
million fake accounts. Those accounts weren't use by the customers. Wells Fargo company
discovered that their employees were the reason behind the scandal by using unauthorized credit
card and bank accounts from customers who wasn't activity using them. Wells Fargo realize that this
problem was dating back since the early 2000's. Wells Fargo also had another scandal that involved
570,000 auto loan customers who were charged with insurance that they didn't use which eventually
resulted in repossessing cars of those customers. Wells Fargo was fined for 185 million dollars after
Wells Fargo said that the employees had opened fake accounts. Wells

Well Fargo Case
There are lot of stuff that Well Fargo could have done to gain the trust back from their customers. As
it is said unsatisfied customer tell many while a satisfied customer only tells few. The scandal would
have caused many customers to loss their trust in the company and it would be important for them to
get back their trust. Firstly, Well Fargo could have offered some sort of discount or special offers to
the customers effected so that they don't leave the company. It is difficult to gain new customers and
even more difficult to keep them. Since, the scandal would have caused them to loss their faith in
the company, it must be their top most priority to try and restore their faith and get new customers
through them. They should also have ... Show more content on Helpwriting.net ...
Since, most of the people effected would have a drop in their credit score because of the
unauthorized applying of credit cards on their names. Well Fargo should work with their experts and
the customers effected to bring back their credit score to the point where they were before the
scandal. As we all know that credit score plays a huge role in a person's life and it would be a
disaster for him to loss opportunities because of his credit score and the transition he was not
reasonable for.
Thirdly, they should place new plans. If Wells Fargo wants to promote itself again, it should come
up with new plans and more strict policies so that the new customers would feel safe and
comfortable. Well Fargo should also offer more benefits than its competitors in order to attract more
customers. It should also be more careful this time and not let anything like the scandal take place
again, because it would be a disaster for the company people won't trust them again.
There are many more things that Well Fargo's could do to gain its customers trust back again. It's
going to be though for them but they should keep trying and try to get as many people as possible
and slowly built form them. There are lot of companies that made mistakes in the starting but
corrected them at the right time and become successful

Wells Fargo Case
Wells Fargo is one of the four largest banks known as the "Big 4" along with Bank of America,
Chase, and Citibank. Each one of these bank holding assets are well above the low billions. Within
in the last couple of weeks, there have been many reports in the media regarding the illegal banking
practices of Wells Fargo. Federal prosecutors have launched a probe into Wells Fargo's unscrupulous
and intense sales tactics.
According to various media sources, since 2011, employees (managers, bank managers and case
managers) created millions of unauthorized card and bank accounts for their customers. In his
interview, former employee Khalid Taha, banker, said "he fielded complaints from customers about
questionable accounts until shortly before he left the bank this summer." He also mentioned that at a
2014 ethics workshop in California, the topic of creaking fake customer counts was discussed and
they were warned not to do so. Several former employees spoke of the pressure management placed
on them to make sales and if they didn't meet their quota they were faced with being written up or
fired. Due to this ... Show more content on Helpwriting.net ...
Jordan Thomas, a partner at Labaton Sucharow and a former Justice Department trial lawyer said,
"How probable is it that you would have a firm–wide, multiyear scheme involving thousands and
thousands of people that senior leaders weren't aware of?" I think the smart money is that some
senior leaders were aware, and it is for that reason that prosecutors are apparently making an
inquiry," he said. In a recent interview, John Stumpf, a veteran chief executive at Wells Fargo
addressed this fiasco with Jim Cramer on "Mad Money." They have "On average 1 percent [of
employees] have not done the right thing, and we terminated them. I don't want them here if they
don't represent the culture of the

Wells Fargo: The Rise And Fall Of Wells Fargo
In 1852, Henry Wells and William Fargo founded Wells Fargo & Co. to serve the West during the
American Gold Rush. There was a panic crisis where many business owners saw their doors closing
in 1855. Following the survival of Wells Fargo, they were given two advantages. The first advantage
being virtually no competition in California, and the second being Wells Fargo had already made a
name for itself being reputable and dependable in their work. From 1855 to 1866 Wells Fargo saw
exponential growth. Around this time Wells Fargo developed a stagecoach mailing system from the
Missouri River to the Pacific Ocean. Fast forward to the Great Depression and Wells Fargo just as
other banking giants were hit severely however Wells Fargo was able to bounce back. Fast forward
to the 70s in particular and Wells Fargo saw immense growth. ... Show more content on
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The company saw millions after millions of losses in its foreign affairs. Towards the end of the 70s
Wells Fargo had begun to slow down. And to start off the 80s Wells Fargo was hit with the news of
an employee embezzling money. In total the employee had embezzled 21.3 million dollars. This
began the fall of Wells Fargo. It wasn't until the 90s did Wells Fargo's luck seem to turn around then
in 1995 Wells Fargo became the second largest bank in California and the seventh largest bank in
the United States with $51 billion in assets. Later on Wells Fargo faced another huge failure when
they merged with First Interstate Bancorp. Both companies were considerably different with Wells
Fargo being mite technically inclined than the other and inner disputes over how they would ruin
things came to light. After this Wells Fargo entered into a friendly merger with Norwest Corporation
taking us into the more modern era of Wells

Wells Fargo Ethical Issues
Is regulation really doing its job efficiently? Is it an accomplice and involved in such kind of
malpractices? I feel that there are a possibility and a fragment of truth to such allegations. It is
implausible that Wells Fargo had mastered the art of manipulating the system without regulators
getting a hint about it. No deception plan can be a full–proof plan if there are people involved in it.
There is a possibility of leakage of information by some or the other person in the organization. So, I
doubt that nobody in Wells Fargo or in regulation did have any part to play in this, maybe they
turned a blind eye.
I believe that corporates always take the easiest way to get out of any imperative ethical issues, they
blame their employees for the wrongdoings and keep top management safe. Like, in this case, Wells
Fargo fired more than five thousand employees in response to the issue of cross–selling and no
action was taken against the top officials of the company. It seems as if the top management is
immune to such ethics–related issues. I cannot imagine that these employees were so skilled that
they ... Show more content on Helpwriting.net ...
One side the corporate world tries to preach moral ethics and on the other, follow something
drastically opposite. I blame the regulation, equally, for disregarding and magnifying this wrongful
cross–selling issue. Regulation should have scrutinized the issue when it broke in the media in 2011
and later in 2013. The news spread and no action was taken by them against Wells Fargo. Finally,
regulation took action on this case in the year 2016 when the issue was hugely published in media. I
doubt that Wells Fargo had done an independent investigation to find the root cause of the problem,
otherwise, they would have reached to the same conclusion that top management's obliviousness on
purpose was a crucial factor in elongating this problem. Not taking any action against the unlawful
act is same as facilitating the unlawful

Wells Fargo & Co.
Rongjiang Bian (B230781) and Xue Song (B316164)
Wells Fargo & Co. (987 words) Introduction
Wells Fargo is a bank holding company providing diversified financial services such as community
banking, wholesale banking and wealth management. Being one of the biggest banks in the US, it
has whopping numbers of branches and connection spots, more than 9000 locations, over 12000
ATMs, and a huge online client group including over 20 million consumers.
Based on an indigenous and normal consumer– orientated strategy, Wells Fargo acquires major
profits from the community banking, small enterprise and individuals business, which are very not
like its competitive peers, Citigroup and JP Morgan.
In this report, we will focus on the performance of this bank during the financial crisis, and try to
find out what contributed to its rapid but stable success.
Pre–crisis assets and funding
In 2006, Wells Fargo owned total assets of $481,996 million, with the distinct constitution of
$354,934 million gross loans. Compared with JP Morgan and Citigroup, the total assets of which are
$ 1,351,520 million and $ 1,884,318 million respectively, Wells Fargo's scale was obviously smaller,
its total assets ... Show more content on Helpwriting.net ...
The stock price of Wells Fargo just slightly decreased 3.28%. In October, 2008, Wells beat Citigroup
and took over Wachovia at the cost of $15.1 billion. Wachovia bring some Impaired Loans to Wells
Fargo, the latter's NPLs ratio increased from 0.77 in 2008 to 3.51 in 2009, however, the total assets
of Well Fargo experienced a great growth. After that, the main business area of Wells expanded to
the east, with the corresponding growth in its assets, branches, clients, and employees, the bank turn
into a national wide bank. In the end of 2008, Wells Fargo became the top five market value bank in
the world and ranked second in the United

In a recent case involving the Wells Fargo company, the judge ordered the company to pay a penalty
worth $5.4 million to a manager who had been fired from the company in 2010 for reporting his
suspicion on fraudulent behavior to seniors on the ethics hotline. The decision that the employee
should resume back into his position in the company was also included in the verdict reached by the
judge. The supposed $ 5.4 million was meant to be the compensatory fees for all the damages that
he had been caused as well as to cater the legal fees. According to the reports from OSHA, the fired
manager had received positive reviews for his job performance but was unsuspectingly dismissed
after he had reported the cases of blackmail and wire fraud by some ... Show more content on
Helpwriting.net ...
Wells Fargo' decision making could also be an ethical issue. It is because the management failed to
seek a fair solution that could help in solving its current internal problems by addressing all the
fraudulent activities that were being reported. Instead, they opted to sack all the employees who
reported the matter without even taking action to investigate the case and evaluate the possible
actions that could be deployed to reflect fairness in the outcome of the decision. Basically, the
ethical decision making in business entails ensuring that the company can protect the rights of their
employees and customers. Sacking of the manager was, therefore, an illustration of the breach of the
ethics as his right was violated.
In the utilitarian approach of ethics, individuals are expected to uphold actions that are expected to
override evil. The employees failed to uphold the utilitarian approach of ethics by failing to comply
with the company's demands and rationally attain its expectations. Instead of engaging in vibrant
marketing and sales promotions to register more customers for the company, they resorted to
opening numerous fake accounts to meet their expected targets. The given action was an illustration
of lack of commitment and dedication to the company. In fact, their actions depicted more evil than
the anticipated

Essay On Wells Fargo
My paper covers the financial impact Wells Fargo & Co. held in a post gold rush economy as well as
the key their survival after the California crash of 1855. These factors are significant in pre–civil by
illustrating how the industrialization and economic fortune of various joint–stock companies unified
the states prior to the War of Northern Aggression. How the company's founders sharply dealt with
the issues that closed the door for hundreds of competitors illustrates the drive and American
business spirit still seen today; without Wells Fargo California, in its new statehood would have
faced economic ruin and a great loss in the settle population.
Wells, Fargo & Co. came into America in the age of economic boom and westward expansion, and
... Show more content on Helpwriting.net ...
In 1854 California suffered a serve drought which crippled the ability to mine for gold. Without the
income mining provided the California economy spiraled. In February of 1855 Page, Bacon &
Company bank failed taking with it, Adams Express Company. Over two hundred companies failed
in direct response to the Panic of 1855. Wells Fargo & Co. remained behind the top three banks from
its opening until 1855; the two leading:,Page, Bacon & Company and the Adams Express Company
both fell victim to speculation and faced runs to withdrawal deposits at such values the corporations
could never pay back. Wells Fargo & Co. received financial backing from a parent–type corporation
in the East, American Express. This backing in the East allowed Wells Fargo to close and shortly
thereafter reopen their doors after the realignment of investments. Due to this approach Wells Fargo
remained the only, large–scale bank in the West and gained notoriety as a trust worthy business.
Initially I began my research paper by delving into general Pony Express history, however, when
writing the first proposal I noticed difficulty finding a significant amount solid primary sources. In
the individual meeting with Dr. Narrett he confirmed my growing suspicion and suggested I look
further into the Wells Fargo component of the Pony Express. Taking his idea and

Wells Fargo Organizational Culture
In September of 2016 new broke that a large organization, Wells Fargo was involved in a rather
extraordinary scandal. Employees of Wells Fargo in order to meet sales goals were creating fake
emails to sign customers up for banking account and credit cards. Debit card and Pin numbers were
created for these accounts. Then they would transfer money back and forth between these accounts.
On top of this they were doing these activities without customers consent. Now some would argue
that some bad eggs don't necessarily make the entire organization bad, however this has a direct
correlation to their culture that revolved around aggressive sales. Managers felt so pressured by the
sales goals that they encouraged their employees to proceed with this ... Show more content on
Helpwriting.net ...
First step that the CEO Timothy J. Sloan did was start to build trust back not only for the customers
but the employees as well. The employees needed to have trust in their higher management and
Sloan tried to do his best in bringing that trust back by admitting that there were some culture
problems. He also brought in outsiders for their advice and evaluations because the best way to fix a
problem is realizing he was too close to the situation and someone else needed to become involved.
Also, working with management to help better understand how to better foster cultural
improvement. Employees were also encouraged to be open and candid on the weaknesses within the
organization and outside culture experts were there to help walk them through the process. Even
ethicists were there to help employees ascertain what was really right and wrong. Finally, Sloan
conducted surveys so that every employee from the bottom to the top could better obtain
information to build up the ethical environment. In the year and a half since the scandal the
company has moved away from the high sales environment. On their website they discuss
eliminating the goals that were once set and instead increasing their employees wages. They have
also started doing an independent review of their sales practices and

Wells Fargo: A Financial Analysis Of Wells Fargo
Economics
The ability to compete in the market is the foundation of all organization's strategic plan. In order to
be competitive the company must offer the right products at the best value. This section will
describe Wells Fargo's products and how they compare with its major competitors. The services
offered by Wells Fargo include, checking accounts, savings accounts, certificates of deposit, credit
card, and loan products.
A Student Checking account with a monthly fee of $5 USD is the entry level checking account
product offer by Wells Fargo. Notwithstanding, this is a better deal than the majority of the other
bank offers. The overdraft charge of $25 USD is higher than average. On the savings accounts,
Wells Fargo's Platinum Savings Account annual percentage yield (APY), is 0.03%. This is in line
with the average amid competitors. Moreover, to avoid fees a minimum balance of $3,500.00 is
required. ... Show more content on Helpwriting.net ...
Propel 365 is Wells Fargo's credit card. This credit card offer point reward as an incentive to
cardholders. The annual fee of the card is $45. This cost is close to the national average cost of
$35.48. The APR, annual percentage rate for this card is between 13.99% and 21.99%. The national
average APR for credit cards is in the range of 16.22% – 22.01%. The cost and APR for the Wells
Fargo Propel credit card along with the rewards program makes it a competitive card for

Case Analysis : Wells Fargo
On September 8, 2016, Wells Fargo was caught in one of the biggest fraud scandals in banking
history. The scandal was brought to light when the international banking and financial company
were caught creating 3.5 million of fake accounts and services on behalf of their clients when they
started to realize additional fees and accounts that they did not sign up for (Sweet, 2017). The
earliest coverage of the scandal came as early as 2011 in an article published by the Wall Street
Journal. This practice was a trickle down effect from upper level management, where the CEO
created the business strategy and gave incentives to the managers to carry out the quota. They
strongly encouraged their employees to sell multiple products to their clients, ... Show more content
on Helpwriting.net ...
When the WSJ article was published in 2011, management did not make much efforts to change to
their sales culture. After the scandal has been brought to global media attention, as a result, Wells
Fargo had to pay a combined penalty of $185 million dollars to Consumer Financial Protection
Bureau (C.F.P.B.), the Office of the Comptroller of the Currency, and the City and County of Los
Angeles in 2016 for their fraudulent practices (McLean, 2017) and an additional $2.8 million that
they have to refund to their customers (Lam, 2017).
The characters that we have chosen that are involved in this scandal is Wells Fargo which mainly
involves former CEO'S John Stumpf and Richard kovacevich, the customers, and also the employes.
The base assumptions that we have made is that Richard Kovacevich is the one who brought the
culture of cross–selling at Wells Fargo and once he stepped down as CEO John Stumpf replaced him
in 2007. Once John Stumpf took over the company he followed Richard 's cross–selling method that
focused more on profits rather than customer satisfaction. This led to over 3.5 million fake bank
accounts and services created by Wells Fargo employees stretching over the past five years. The
reason this was done was due to the amount of pressure the company would put on their employees
to meet their ridiculous quota. Then we have the customers who had no idea that they were being
charged for

Wells Fargo Case Analysis
By:
Annette Garcia
Mikey Tran
Thy Nguyen
Omar Ennabe
April 24, 2007
Wells Fargo & Co. is a diversified financial services company in the United States with consumer
finance subsidiaries doing business in Canada and Puerto Rico.
Headquartered in San Francisco, California, Wells Fargo is a result of a merger between California–
based Wells Fargo & Co. and Minneapolis–based Norwest Corporation in 1998. The new company
chose to keep the name Wells Fargo, to capitalize on the 150 year history of the nationally
recognized Wells Fargo name and its trademark stagecoach.
Wells Fargo & Co. is one of the United States top–40 largest private employers. They ranked fifth in
assets and fourth in market value of their stock among their peers.
As of ... Show more content on Helpwriting.net ...
By the end of the 1970's their growth slowed somewhat. In 1980 the new chairman said "It's time to
slow down. The last five years have created too great a strain on our capital, liquidity, and people."
1980–1990 In 1981 the banking industry was shocked by the news of a $21.3 million embezzlement
scheme by a Wells Fargo employee. It was one the largest embezzlements ever. In the early 1980s
there was a sharp decline in Wells Fargo's performance. They had to recover from there loss and had
to eliminated branches and cut 3,000 jobs. In 1986 Wells Fargo purchased rival Crocker National
Corporation. This acquisition was a great move for Wells Fargo. Crocker doubled the strength of
Wells Fargo making it the tenth largest bank in the United States. Concentrating on California as
their target market Wells Fargo was a successful strategy.
1990–1995
During this time Wells Fargo was loaded with a lot of debt stemming from the risky real estate loans
from the 1980s. However the bank had improved their loan–loss ratio. Despite the poor economy in

the early 1990s, Wells Fargo had healthy gains.
1995–Present
In late 1995, Wells Fargo began a pursuing a hostile takeover of First Interstate Bancorp. Wells
Fargo but a bid in for $10.8 billion but then other banks came and tried to bid as well. First Interstate
Bancorp ran into regulatory difficulties with the way it had structured its offer. There were then talks
between Wells Fargo and First Interstate which led to a

Employee Behavior In Wells Fargo
Wells Fargo was founded on March 18th, 1852 by Henry Wells and William Fargo to serve the West
during the gold rush. The company offered Banking (buying gold and selling paper bank drafts as
good as gold) and Express (rapid delivery of the gold and anything else valuable). They opened for
business in San Francisco, and earned a reputation of trust by dealing rapidly and responsibly with
people's money. (History of Wells Fargo, n.d.) Today, Wells Fargo is a bank holding company that
engages in the provision of banking, insurance, investments, mortgage, and consumer and
commercial finance. Wells Fargo is #5 of the World's largest Public Companies for 2017, according
to Forbes. The company has a market value of $274.4 Billion with 269,100 employees. ... Show
more content on Helpwriting.net ...
Wells Fargo has established their values as being committed to the best interests of its customers,
but just posting them online or on an office wall wasn't enough. Leaders need to live by those values
every day because employees notice how they behave. If Wells Fargo is truly committed to the best
interest of its customer's, then employees should have goals that reflect that mission. Employees and
the company could have benefitted from frequently reviewing their goals to ensure they kept up
with the company's mission and values. They need to set the right goals and have the right
performance conversations. The high pressure and unrealistic goals was the primary issue that drove
the employees to commit the fraud. If the managers had focused more on better motivational tactics,
and reinforcing the values of the company rather than high pressure and scare tactics for
performance goals not being met, there may have been a different outcome in how employees
worked to meet their

Wells Fargo Case
Wells Fargo & Company is an American international banking and financial services. The
headquarters is in San Francisco, California, and they work throughout the country. Wells Fargo
offers many different services.
In 2016 Wells Fargo employees were accused of creating fake accounts under names of real
customers. "Ghost Accounts" which affected many of their customers. The authorities investigated
and found about 1.4 million worth in fake accounts. Wells Fargo was sued and had to pay 185
million in fines to the city and federal regulators.
As a manager, the most important thing is to rebuild trust with clients, for this accident the company
of Wells Fargo will apologize to any of the families that were affected by this. The employees
involved ... Show more content on Helpwriting.net ...
It comprises many affiliated businesses and is one of the South Korean biggest companies. Samsung
was created by Lee Byung–Chul in 1938. The company expanded into areas like food processing,
insurance, textiles, securities, and retail. Samsung is been in the electronics industry since 1960,
which was when the company started to grow. When the Samsung's Galaxy Note 7s came out there
seem to be some problems with the product overheating, nothing was proven until in 2016 the phone
was caught on fire caused by the batteries. The phone–makers assured they had changed battery
suppliers. The real causes still remain a secret.
As a manager of the Samsung company, we won't release a new phone until we have fixed the
battery problem. We apologize if our mistake has caused any harm and if it has, your money will be
refundable for any of the purchases of this phone.
L'Oréal is a French cosmetics company, it was founded in 1909 by Eugène Paul Louis Schueller.
The company is registered in Paris. It is recognized as one of the world's largest cosmetics
companies. L'Oréal has developed businesses in cosmetics, concentrating on hair color, skin care,
sun protection, make–up, perfume and hair care. L'Oréal has been recognized by their beauty and
health industry, for their commitment to business standards and

Wells Fargo Essay
Prior to the great recession in 2008, Warren Buffet was once quoted with saying "There's never just
one cockroach in the kitchen", Buffet was referencing at the idea that a financial crisis of any nature
does not just occur on its own, but is rather typically a result of a set of preceding events or actions.
In recent news, Wells Fargo is the latest transgressor on Wall Street, and appears to have been
involved in one of the largest financial scandals ever.
Wells Fargo & Company is one of the largest financial institutions in the world, and only recently, in
July of 2015 did it become the largest bank by market capitalization with a total value just north of
$250 billion dollars. Dating back to 2011, Wells Fargo employees secretly created ... Show more
This issue of fake customer accounts should be taken as a serious problem raised among customers
whose trust in financial institutions keep diminishing. At the center of this fiasco was the
atmosphere created at Wells Fargo that enabled this type of fraudulent activity. Inadvertently or not,
Wells Fargo ultimately designed a system that encouraged employees to open a lot of falsified
accounts. When Wells Fargo imposed unrealistic sales quotas on its employees, it naturally drove its
bankers to engage in fraudulent behavior to meet those almost unreachable goals. Over the few
decades, Wells Fargo had built up a reputation detaching itself from the likes of Wall Street by
putting their customers first before money. However, one cannot help but think that Wells Fargo put
money before customers as their aggressive sales goals led to the opening of unauthorized accounts
without customer knowledge. Not only was this explicit fraudulent activity, but it questions the
precautionary measures that were either in place and circumvented, or rather not in place at all. Both
ways, Wells Fargo was doing something wrong, and the doors are now wide open for regulators to
fully investigate how such unethical and illegal activity

Our Paper Today Will Be On Wells Fargo. Wells Fargo Is
Our paper today will be on Wells Fargo. Wells Fargo is an American bank that was created in 1852
by Henry Wells and James Fargo. It is the second largest bank in the USA in terms of market cap,
operates in over 42 countries around the world, and has over 260,000 employees.
In 2016, federal regulators caught Wells Fargo creating millions of fake bank and credit card
accounts; over 1.5 million bank accounts were created. Furthermore, federal regulators also said that
565,443 credit cards were created, and 1400 of those accounts had been charged over 400,000
dollars in fees. Wells Fargo employees broke many ethical and legal boundaries and engaged in
counterproductive work behavior.
Counterproductive work behavior has a negative ... Show more content on Helpwriting.net ...
This practice was so common that Wells Fargo employees had several methods for doing this. The
first method is sand bagging. Sand Bagging involves failing to open accounts by customers at their
requested date, instead accumulating accounts to open in the next sales period to inflate profits.
Another practice was called Pinning which was creating pin numbers without customer's
authorization, and attaching them to credit cards. Then employees would impersonate customers on
Wells Fargo's computers and use these pin numbers to create online banking and bills for customers.
Finally, a practice called bundling was done where Wells Fargo employees would mislead customers
saying that certain banking products were only available in bundles which forced customers to add
more products than they wanted. So, one wonders, how could this have happened? Why did high
expectations of sales lead to unethical, almost criminal behaviour? This is tied to Goal Setting
theory. Goal setting theory, created by Edwin Locke, states that employees are motivated by clear
goals, and appropriate feedback. Individuals that were given clear, specific and difficult goals had
greater performance than individuals given general and easy goals. However, research has shown
that setting unattainable and challenging goals can lead to risky or even unethical behaviour. A study
done by

Wells Fargo Leadership Style
Leadership Governance and Management
Wells Fargo stands as one of the global companies with an exceptional reputation for integrity as
well as principles performance that has been guided by their exceptional leadership. The vision the
company is committed to realizing is in using their values as a guide for each of their decisions,
conversations as well as interactions. The overall assertion is that the company employs its values in
anchoring their products and services in all their channels of operations (Wells Fargo, 2016). The
core leadership attributes that have facilitated the realization of Wells Fargo vision are informed by
the fact that one has to have a passion for the business, possess ideas as well as the desire to lead.
One of ... Show more content on Helpwriting.net ...
The identification of the nominees for the director or assessing individuals who have been
recommended by stakeholders, the governance and nominating committee is tasked with the
determination, via its sole discretion whether the individuals attains the minimum qualifications as
stipulated by the board (Wells Fargo, 2016).
On the issue of the independence of the director, the board maintains a significant majority of their
members is meeting the independence criteria as established by the New York Stock Exchange
(NYSE) (WellsFargo.com, n.d). The board through the assistance of the governance and nominating
committee makes independent determinations on an annual basis at the time the board has approved
the director nominees for inclusion in the proxy statement.
SWOT

The Wells Fargo Scandal
Wells Fargo is a well known banking company that has recently been in the news for some not–so–
good reasons. The Wells Fargo company has been around for a long time and is trusted by their
many customers to treat them fairly when it comes to opening new accounts or managing current
accounts. However, according to some of Wells Fargo's team members (what they call their
employees), Wells Fargo has "strict mandates to sign existing customers up for additional products,"
(Davidson 1). This means that they want their customers to open new accounts, get new credit cards,
transfer a 401(k), and/or take out a mortgage. Since most customers refuse to do so, some of the
employees thought that they should go ahead and open new accounts without the customers'
consent. This later back fired when the customers received late notices on payments for the accounts
they did not agree to open and did not know they had. Similar actions were happening at Wells
Fargo banks ... Show more content on Helpwriting.net ...
The same problems were happening at Wells Fargo banks nation wide. Somehow, employees at
branches all over the nation got the same idea to scam customers, and start new accounts for them to
get more money. This is an example of hyperdyadic spread. Hyperdyadic spread is the tendency of
an effect to spread from person to person to person, but it does not stay inside a persons direct social
ties. The effect spreads to people that person does not even know. For example, if one person starts
to eat healthy and then their friend starts to eat healthy, that is dyadic spread. However, when a
friend of a friend of a friend that the original healthy eater does not know decides to start eating
healthy, that becomes known as hyperdyadic spread. When the idea to scam customers spread across
the nation, that effect became hyperdyadic spread. It is doubtful that every Wells Fargo employee
that decided to scam customers is in direct social ties with each

Essay Wells Fargo
Wells Fargo offers a wide range of financial services, claiming in its investor presentations to
operate more than 80 divisions while still being able to stand for more then one thing. In addition,
the company claims to be one of the most "integrated" of financial services companies. For example,
instead of running a stock brokerage with separate branches and different customers, Wells Fargo
stock brokers sit in retail branches, and generally only serve banking customers. (wellsfargo.com)
Despite this wide range of divisions, Wells Fargo only describes in detail three different business
segments when reporting results, which are Retail Banking, which is typically your everyday
banking where you have your savings, checking accounts, loan ... Show more content on
Helpwriting.net ...
It's not unlikely that another company would come and take over the place of Wells Fargo as far as
also dominating the financial market, because they are a lot of independent companies hoping to get
the same success as Wells Fargo and they are all learning from the mistakes of other companies who
succeed and failed, but also gaining a lot of knowledge from the same companies. If one is out there,
it would have to be a company well established already or merging with one who is well established.
The largest Threat to the market of banking would have to be the Government with the changing of
interest rates and pricing of a lot of products. If the interest rates drop then that helps the market and
people go take more loans out and spend more money at the same time, but if interest rates go up as
they are now, consumers tend to just save money and not spend as much, also not take out any loans.
Which in the end hurts the whole market?
Opportunities
Opportunities for companies to become larger and more successful should always be a main topic,
unless your mission statement is to stay local "mom and pop store", I doubt that Wells Fargo's
mission statement is of that, not if net income increased 13 percent in 2004, dividends per common

Wells Fargo is a financial institution.A financial institution is an establishment that conducts
financial transactions such as investments, loans and deposits. Almost everyone deals with financial
institutions on a regular basis. Everything from depositing money to taking out loans and
exchanging currencies must be done through financial institutions. Advisory The core of our
Advisory platform is a strategic focus on the long–term advantages and benefits that align with their
clients' needs, goals, and risk tolerance. Advisory offers flexibility and choice amongst a wide array
of financial products and services – with just one client fee, (based upon account assets), that covers
both investment advice and trading costs. Lending & Banking products and services play an
important role in managing clients' wealth. Helping clients make borrowing decisions in the context
of their larger financial strategy and goals may help them benefit from tax efficiency, lower
borrowing costs and an integrated approach to planning.
Retirement Planning One of the biggest concerns for many of their clients will be how to make their
way into retirement with the financial support they'll need in their golden years. They offer you a
wide variety of products and accounts to support a flexible retirement strategy for all of their clients.
Traditional Brokerage Products Some financial products and services may be found in nearly every
firm, but Wells Fargo Advisors goes the extra mile by committing to

Well Fargo Case Summary
In this Well Fargo scandal, there is two aspects need to think about :the auditing and ethical.
The Auditing
Auditing often emphasize the independence of auditors, However, it is not easy to balance the
profitability and independence. KPMG has served as Well's auditor for more than 87 years, the
employment and employment relationship bring a little challenges to meet the independence
requirements.
Well Fargo was establishing false credit card account from the beginning of 2011. From 2011 to
2016, During such a long audit period, auditors cannot found the significant issues with the internal
control. From this view point, KPMG was lacking due professional care in the progress of auditing.
In auditing ,the auditor would address that auditing has a responsibility to plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether caused by error or fraud. Auditor have no responsibility to plan and perform
the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud that
are not material to the financial statements will be detected. In this case, the misstatement is
material, KMPG has an compelling obligation. The auditor failed to detect the relevant fraud
account for six years. According to Sarbanes–Oxley Act of 2002, ... Show more content on
Helpwriting.net ...
(Cross–selling is the action or practice of selling an additional product or service to an existing
customer). As a former head of the community banking division at Wells Fargo, Carrie Tolstedt
strongly driving cross–selling performance strategies is seen as the main cause of the massive fake
accounts. Besides, behind the cross selling, some employee salary depend on the their sale
performance, and the sale targets is too high to achieve. In my opinion, the cross–selling
straightforward to trigger account fraud at the grassroots

Essay On Wells Fargo
General business activities
As the fourth largest banking and financial services company in the US, Wells Fargo offers a wide
range of careers in the financial industry. Based in San Francisco, they provide banking, mortgage,
investment and financial services throughout the US, with over 9,000 stores nationwide. Their
decentralized structure means that every one of their stores functions as a local headquarters for all
their customer's financial needs.
Wells Fargo employs around 280,000 people, and can boast a customer in one out of every three
American households.
Wells Fargo has voiced their commitment to environmental responsibility in all areas of business,
supporting environmentally friendly business opportunities and providing a ... Show more content
As well as offering a variety of diverse career paths, they encourage ongoing education with tuition
reimbursement for careers related courses, offer a wide range of online career development
resources, and encourage staff to set and meet personal career goals.
Benefits
Wells Fargo offer a comprehensive benefits package. This package includes dental, medical, and
vision plans, 401K plans, paid leave, discounts on company products and more.
Employment
Retail employees
Wells Fargo offers a wide range of retail roles, including personal and phone bankers, store tellers
and mortgage consultants, and many of the company's employees started off in one of these roles.
Leaders are committed to offering ongoing development and career progression.
Phone Bankers interact with customers by phone, offering solutions to their financial needs and
promoting suitable Wells Fargo products and services. They can expect to earn

Fraud In Wells Fargo
The Company
As of January 2016, Wells Fargo is now the third largest bank in the United States after JPMorgan
Chase and Bank of America. Henry Wells and William Fargo founded Wells, Fargo & Co. in 1852.
Wells Fargo first opened in San Francisco and quickly built up a positive reputation backed with a
goal to provide the most efficient way of banking. Their headquarters still remain in San Francisco
with thousands of stores nationwide. They were known for their fast and trustworthy services in the
1860s and thus earned everlasting fame. In the 1900s, Wells Fargo became a commercial bank in
northern California, supporting local businesses ("History of Wells Fargo"). Wells Fargo had always
brought banking convenience to their customers.
Modern ... Show more content on Helpwriting.net ...
The company has already lost many customer and accounts due to this scandal. Bad management
was another component in this scandal and to regain the communities' trust, they have to adopt
different management practices. Although the company did get rid of their sales goals program, the
company will still practice cross selling without fraud and theft. Wells Fargo is known for their
history of successful cross selling to customers. They do not plan to change that, however they plan
to do it without such impossible goals. As Stumpf said, he still believes in cross selling, and that it
was "shorthand for deepening relationships" (Reuters,

Abstract
Arbitration is defined as "the submission of a dispute to one or more impartial persons for a
decision, known as an award.1" It is a more effective means of handling disputes in a quick and
concise manor. There is much customization available in an arbitration, however, Forced arbitration
is a clause primarily used by large companies to speed up disputes and to help keep negative press
coverage from effecting their company. Often, we see these clauses in banking agreements, cell
phone companies and others corporations that have a very large consumer base.
In the month of September of 2016, Customers of Wells Fargo learned of a disturbing fact: The
company in which they entrusted their primary means to an end, had been defrauding ... Show more
Actions Brought
First cause of action brought was California's Unfair Competition Law, Cal. Bus & Prof. Code
17200, et seq., which is in place to protect consumers by forcing commercial banks to use fair
competing environment. This law allows for action against any fraudulent or unfair business
practice that causes harm to consumers.2
Second cause of action states that Wells Fargo violated the California Customer Records Act Civil
Code Section 1798.80, et seq. Wells Fargo violated consumer "personal information," protections
described by Civil Code sections 1798.80 and 1798.81.5(d), which protects among other things,
name, signature, address and Social Security number all of which were used by employees with
special access to open the fraudulent customer accounts2.
Third cause of action is the violation of the Arizona Consumer Fraud Act. By engaging in
misleading actions with the handling of customer accounts, Wells Fargo was in violation of A.R.S §
44–1522(A). These unlawful actions caused significant loss of money and undue stress as a result of
the deceptive actions taken by Wells Faro.2
Result
Five similar actions were brought upon Wells Fargo to make a total of eight legal actions. However,
on September 10, 2015, Wells Fargo moved to dismiss the complaints and compel the Plaintiff's into
arbitration.3 This action was taken through the arbitration clause Wells Fargo slipped into the
legitimate accounts of their customers. On

Wells Fargo Case Study
The financial sector is confronted with a high rate of competition. Getting new customers, increase
turnover, integrating with new and existing information technology changes can be some of the
challenges that the financial sector face. A banking institution will not be left out of the contest to
become the highest performing unit in the sector. Wells Fargo's cross–selling culture helps them gain
many new customers by opening multiple bank accounts for new and existing customers. Also by
opening accounts for non–existing names. These actions attracted the attention of the mass media.
According to Emily Glazer (2016), a frequent contributor to the Wall Street Journal, "for more than
15 years, selling more products to customers has been a ... Show more content on Helpwriting.net ...
2). Due to the high increase in the number of fake accounts discovered and the effects it had on
different Wells Fargo customers, the bank executives decided to carry out an investigation of new
accounts opened in the past three years from 2011 to mid–2015.
According to Glazer (2016), one of the former employees of Wells Fargo said that "if you could sell,
you had a job and bank branch managers pressured them to look for sales prospects at bus stops and
retirement homes" (para. 5). How will a bank manager make bank employees become sales agents?
This type of leadership style is questionable and unethical. Consequently, Due to the issues of fake
accounts openings in over 6,000 Wells Fargo branches; the scandal quickly brings the attentions of
the news media. Glazer (2016) wrote that the "Wells Fargo chairman and chief executive office,
John Stumpf denied that the company's culture is obsessed with nonstop selling that ran in different
bank branches and blamed it on some employees that didn't honor the bank's values" (para. 6).
During the wake of the scandal followed by the thorough investigations many Wells Fargo
employees, including district managers, top managers, branch managers, and other bank employees
were fired from their jobs. Over 5,300 Wells Fargo employees lost their jobs over the five–year
period of investigation and Wells

Ethical Dilemma In Wells Fargo
In 2016 Wells Fargo was fined a combined $185 million for the practices of their employees. The
employees were found to open banking accounts in the name customers, without the consent of the
customers. Those accounts include checking, savings, credit card, and online banking accounts.
Throughout the bank and all of their branches, 2.1 million accounts were opened, leading to the
creation of $2.4 million in fees. The reason the employees of Wells Fargo opened all of these fake
accounts is due to the unrealistic sales goals that upper management set. One employee stated,
"When I worked at Wells Fargo, I faced the threat of being fired if I didn't meet their unreasonable
sales quotes every day," (Levine). Due to the actions of both lower level ... Show more content on
Helpwriting.net ...
It seems as if the harm is trying to be maximized and not the food. To start, this practice was hurting
the customer by charging them money and hurting their credit score. Secondly, this practice was
doing almost nothing for the employees. Yes it was allowing them to reach their sales goals, but the
majority of the accounts they opened did not gain money. Bloomberg reports that out of the 2.1
million accounts that were opened without consent, only about 5% of those accounts generated
money for Wells Fargo (Levine). For Wells Fargo, they not only had poor employee support from
their employees, they also only made $2.4 million from these practices. In return, Wells Fargo was
fined $185 million for the actions of their employees. Overall, the best a group came out was even
and as for the society, Wells Fargo and their customers, these actions caused more harm than

Ethical Issues In Wells Fargo
Wells Fargo is a multinational financial institution, according to their website, it was founded on
March 18, 1852. Wells Fargo has been around for a full history, in the financial services industry for
over 160 years. This puts Wells Fargo in a place where they have built a reputation with their
customers that has earned their trust in all of their financial needs over the 160 years. According to
the Wells Fargo website, their " their name is forever linked to the image of six horses stagecoach
thundering across the American West, loaded with gold. This image puts Wells Fargo in the history
of memories of Americans as well as part of their journey throughout American History. Wells Fargo
& Company is a financial institution that offers financial ... Show more content on Helpwriting.net
...
Senior Management as they rise through the organization need to be critically when screened by
their superiors. Traits that are seen in lower management roles will definitely play a critical role in
their governance in future senior management positions. Lastly, corporations will be better served, if
they develop a culture where employees can comfortably challenge the obvious ethical violations or
challenges. While it might be uncomfortable for senior management to be challenged, it is also
detrimental to the organization to be realistic on extreme and obvious violations of ethics and laws.
As we learned in class and read the book Giving Voice to Values by Mary Gentile. "How to speak
your mind when you know what's is right" taught us to speak up our own voices and in a situation
that allow us to voice our values and position ourselves from a sense to do what's right. Although
not all the time we can be certain in all situations what the right thing to do is. However, like Wells
Fargo, we quickly recognize that the employees that were in the lower end roles didn't speak up and
follow an unethical behavior that cost them their job as well as their career. These employee's didn't
know how to speak their own voices as well as mind when knowing what is right. We must never
allow ourselves to be seen as childish novels as the "The emperor has no close". We must

Case Study Wells Fargo
FINAL EXAM I
MGMT 512: CORPORATE GOVERNANCE
SPRING 2017 | MMBA PROGRAM
AHMET BOZ – 0055103
AHMET BOZ 0055103 MGMT 512 FINAL EXAM I
2
CHOSEN CASE: WELLS FARGO ACCOUNT FRAUD SCANDAL
1. Brief Introduction of the Company
Wells Fargo is an international bank headquartered in San Francisco, California. Wells Fargo is the
world's second largest bank by market capitalization and the third largest bank in the U.S. by assets.
In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public
companies in the world and ranked 27th on the Fortune 500 list of largest companies in the United
States. In 2015, the company was ranked the 22nd most admired company in the world, and the ...
Show more content on Helpwriting.net ...
5. My POV About the Case
I think that this scandal was directly related with the management and sales culture of Wells Fargo.
Pressuring sales goals, high and uncontrolled incentives, only commercial–focused management
perspective made all employees to ignore customer rights and satisfaction. Because the lack of a
customer oriented management culture, Wells Fargo BoD didn't pay attention to build the proper
audit and control organization. Moreover, BoD didn't encourage the employees, who felt
uncomfortable about the system, to talk and expose the fraud.
In the direction of cultural–based root causes of the scandal, Wells Fargo should define the
company's values, mission and vision statements afresh. And the company should be sure about that
each word of these statements are adopted by every single employees. Moreover company should
re–build its organizational structure and procedures according to new statements. Also, company
should work intensively to gain the trust of customers again.

AHMET BOZ 0055103 MGMT 512 FINAL EXAM I

Wells Fargo : Course Work
Wells Fargo: course work
"Explain the role of Wells Fargo in the financial system. Assess its exposure and performance from
2009–2016, after the global financial crisis, including a comparison with peers. Did it do well or
badly?"
The bank
Wells Fargo is an American international banking and financial services holding company which
was founded in 1852 by Henry Wells and William G. Fargo in New York. As of the end of 2015, the
total assets of Wells Fargo are more than $1.7 trillion, ranking 3rd all over the U.S. And in 2013,
Wells Fargo surpassed ICBC and became the world's largest bank by market capitalization for the
first time, then exchanged the top bank place with ICBC for four times in the next years.
Wells Fargo today is a result of merger between San Francisco–based Wells Fargo & Company and
Minneapolis–based Norwest Corporation in 1998 and the subsequent 2008 acquisition of Charlotte–
based Wachovia. Now, it has become the only U.S. bank to have the highest possible credit rating
from both Moody 's Investors Service, "Aaa", and Standard & Poor 's Ratings Services, "AAA".
And also, it was one of the minority of the companies who had gotten through the financial crisis in
2007 stably compared with peers.
So, this report will focus on the performance of Wells Fargo after the financial crisis to see how well
did it do in the post–crisis times and try to find out the reason of its success.
Description of its business activities and performance
As a diversified,

Introduction
Wells Fargo was established in 1852 by Henry Wells and Williams Fargo who joined a group of
other investors to form a transportation and banking company. In 1849, gold was discovered in
California, which encouraged a huge demand for its cross country shipping and by 1852 Wells Fargo
shipped its first consignment of gold. Wells Fargo also established merger deals with Pony expresses
which made them one of the pioneers of pony transportation. This company later expanded to a
company that offered not just pony and gold transportation services, but also offered banking
services by purchasing gold and selling paper bank drafts as good as gold. In 1905, the banking
branch of the company merged with the Nevada National Bank and established its new headquarters
in San Francisco. ("Wells and Fargo start shipping and banking company", 2016).
Facts surrounding the case
September 2016 was a memorable month for Wells Fargo, one of the oldest ... Show more content
Until the intent or motive is recognized, a problem cannot be described or solved. This should be a
major question to ask in the Wells Fargo case. Most workers, especially in sales and marketing jobs
are known to be compensated and promoted based on their performances (number of products and
services sold, number of set targets met). So it is possible that Wells Fargo compensation and
promotion structure motivated these employees to engage in such fraudulent acts in order to boost
their incentives and bonuses which was measured based on their performance. Because it is
surprising that such huge number of employees would engage in such acts to cheat customers for a
period of five years. Both former and current Wells Fargo employees told regulators that their
motivation to open unauthorized accounts was because of the compensation policies and felt
extreme pressure to do that to benefit from such policies (Corkery

What Is Wells Fargo Unethical
Although the Wells Fargo Bank fraud case, came to light in September 2008, the alleged fraudulent
activity is traced back to January 1, 2011. It is alleged that the employees were opening various
consumer accounts, without permission, to help meet company sales goals. The Wells Fargo
employees did not stop there. Since newly opened accounts must be funded, money was then taken
from actual accounts the consumer owned. Some of the money being transferred was at a cost to the
consumer. Consumers incurred overdraft fees, maintenance fees, insufficient funds fees on the
accounts from where the money was taken. In addition to the fees on their real bank accounts, the
consumers who unknowingly has a credit card opened in their name were also being ... Show more
It simply means that it would have been a little more difficult for employees to cause so much
damage. Therefore, it is important that one type of internal controls in place, should be detective
controls. This would consist of comparing reports for sales. For instance, if employee A had a
sudden increase in accounts being opened, that may be cause for further review. Additionally, for the
consumers that were charged overdrafts, the bank branches should have reconciled those errors,
noting the cause was the funding to another Wells Fargo product. A list of possible NSF charges is
sent to bank branches daily. Each NSF is supposed to be reviewed, and either removed to allow the
checks funds to clear, or allowed to go thru as an NSF. Proper review of these NSFs for the funding
of other Wells Fargo products should have been reviewed more thoroughly. Another detective
control that should be in place are verifications. For each Wells Fargo account opened, both a letter
and an email should be sent to the consumer with a notice that an additional account had been
opened. There should also be verification via the software that verifies data discrepancies, like
address, or email variances on accounts with the same owner. ("Basics of Internal Controls,"

Wells Fargo Scandal

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