Wells Fargo Fiasco
Sep 21, 2016, 11:07 am
#31
Join Date: Apr 2011
Location: Colorado
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Posts: 159
Don't forget that no unauthorized account would have been opened had not an employee violated numerous internal rules (and perhaps laws) to effectuate the opening.
Disgusting and despicable. I am not a fan of Wells Fargo at all.
The WF near us is ridiculous. I will never go there again because of the pressure. I go to one that is two miles away. It's like the one near us has not gotten the message to stop pushing people into credit cards and additional accounts.
Sep 21, 2016, 11:12 am
#32
Join Date: Apr 2014
Posts: 189
Anytime you have a sales job where a large portion of the compensation is incentive based and determined by sales goals, certain employees will break the rules. Some of it is greed and some is based on desperation, it seemed like these were pretty low level employees with low base salaries. But in financial services, brokers used to churn accounts and buy/sell stocks just to generate commissions. Mortgage brokers would refi or open unnecessary HELOCs just to get the fees. And bankers across all firms do what the WF bankers did.
I knew a few former Wells bankers and years ago they told me about the culture. They weren't aware of false accounts, but it's not surprising based on their stories of the enormous pressure everyday to open new accounts and sell. I knew some local bankers at regional banks and they were under similar pressures so it will be interesting as to who else will get caught up in this.
I'm curious as to what will happen now that they've eliminated sales goals. Everyone likes to pretend otherwise, but most front line staff at bank branches are sales people and their compensation structure is based on that. If bank branches aren't generating as much revenue, will that hasten the shift to fewer branches that is already happening? The only reason to bring people into a branch is the opportunity to upsell them on something and to a lesser extent maintain loyalty. It's cheaper to handle most transactions electronically without human interaction.
I knew a few former Wells bankers and years ago they told me about the culture. They weren't aware of false accounts, but it's not surprising based on their stories of the enormous pressure everyday to open new accounts and sell. I knew some local bankers at regional banks and they were under similar pressures so it will be interesting as to who else will get caught up in this.
I'm curious as to what will happen now that they've eliminated sales goals. Everyone likes to pretend otherwise, but most front line staff at bank branches are sales people and their compensation structure is based on that. If bank branches aren't generating as much revenue, will that hasten the shift to fewer branches that is already happening? The only reason to bring people into a branch is the opportunity to upsell them on something and to a lesser extent maintain loyalty. It's cheaper to handle most transactions electronically without human interaction.
Don't forget that no unauthorized account would have been opened had not an employee violated numerous internal rules (and perhaps laws) to effectuate the opening.
I think WFC be faulted mainly for lack of internal controls & risk management to prevent unauthorized accounts from being opened. They also seem to have been slow to address the problem, starting first with a remedial program in So Cal before expanding nationwide.
No employee likes unrealistic demands from their boss, but that doesn't give you carte blanche to break the rules.
I think WFC be faulted mainly for lack of internal controls & risk management to prevent unauthorized accounts from being opened. They also seem to have been slow to address the problem, starting first with a remedial program in So Cal before expanding nationwide.
No employee likes unrealistic demands from their boss, but that doesn't give you carte blanche to break the rules.
Sep 21, 2016, 11:53 am
#33
Join Date: Oct 2014
Location: PHL
Posts: 226
A number of years ago we forgot that the deadline was coming for state inspection on one of our cars. Our regular local mechanic was booked up and the only available appointment was at Pep Boys, so we (very reluctantly) took it there. Shortly after we dropped it off we got a call that informed us that the rear brakes and drums were out of spec and needed replaced.
I knew better, so I told them to put everything back together and forget the inspection. They were very surprised to get a visit from the state inspector after I filed a formal complaint.
Bottom line is the mechanics there are paid piecework, and they knew the end of the month was coming up and we needed to get the car inspected. They just didn't think I would call them on it.
Some people generally do what they think they have to in life, and some do what they think they can get away with. I guarantee that if the senior management at these financial institutions knew they would go to jail for doing certain things, those things wouldn't happen.
Sep 21, 2016, 12:35 pm
#34
Join Date: Oct 2013
Posts: 1,322
"The pressure was too great."
"I didn't have a choice."
"I just wanted to avoid negative repercussions."
All of these are trotted out to try & justify a wide range of behaviors.
Example: Student cheating on a test. Or, teacher passing a failing student.
P.S. I wouldn't want any bank employee who did this sort of thing anywhere near my account.
"I didn't have a choice."
"I just wanted to avoid negative repercussions."
All of these are trotted out to try & justify a wide range of behaviors.
Example: Student cheating on a test. Or, teacher passing a failing student.
P.S. I wouldn't want any bank employee who did this sort of thing anywhere near my account.
Sep 21, 2016, 12:49 pm
#35
Join Date: Aug 2013
Posts: 208
"The pressure was too great."
"I didn't have a choice."
"I just wanted to avoid negative repercussions."
All of these are trotted out to try & justify a wide range of behaviors.
Example: Student cheating on a test. Or, teacher passing a failing student.
P.S. I wouldn't want any bank employee who did this sort of thing anywhere near my account.
"I didn't have a choice."
"I just wanted to avoid negative repercussions."
All of these are trotted out to try & justify a wide range of behaviors.
Example: Student cheating on a test. Or, teacher passing a failing student.
P.S. I wouldn't want any bank employee who did this sort of thing anywhere near my account.
Sep 21, 2016, 6:16 pm
#36
Original Poster
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
And just who has responsibility for maintaining adequate internal controls and risk management?
Don't forget that no unauthorized account would have been opened had not an employee violated numerous internal rules (and perhaps laws) to effectuate the opening.
I think WFC be faulted mainly for lack of internal controls & risk management to prevent unauthorized accounts from being opened. They also seem to have been slow to address the problem, starting first with a remedial program in So Cal before expanding nationwide.
No employee likes unrealistic demands from their boss, but that doesn't give you carte blanche to break the rules.
I think WFC be faulted mainly for lack of internal controls & risk management to prevent unauthorized accounts from being opened. They also seem to have been slow to address the problem, starting first with a remedial program in So Cal before expanding nationwide.
No employee likes unrealistic demands from their boss, but that doesn't give you carte blanche to break the rules.
Sep 21, 2016, 10:27 pm
#37
Join Date: Oct 2013
Posts: 1,322
If management forgot to lock the vault at night, they would be negligent, but that certainly wouldn't excuse a robbery, would it?
Sep 22, 2016, 8:58 am
#38
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Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Ahem, the responsible parties for the fiasco are to be found in the annual report. The annual reports tells us who to drag out to the hanging tree. Anyone know which credit card gets the most points for buying the rope?
See https://www.sec.gov/rules/final/33-8238.htm
As directed by Section 404 of the Sarbanes-Oxley Act of 2002, we are adopting rules requiring companies subject to the reporting requirements of the Securities Exchange Act of 1934, other than registered investment companies, to include in their annual reports a report of management on the company's internal control over financial reporting. The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
See https://www.sec.gov/rules/final/33-8238.htm
As directed by Section 404 of the Sarbanes-Oxley Act of 2002, we are adopting rules requiring companies subject to the reporting requirements of the Securities Exchange Act of 1934, other than registered investment companies, to include in their annual reports a report of management on the company's internal control over financial reporting. The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
The company, obviously, and they should be faulted for such failure. But just because the controls didn't work, that doesn't justify employees breaking the rules.
If management forgot to lock the vault at night, they would be negligent, but that certainly wouldn't excuse a robbery, would it?
If management forgot to lock the vault at night, they would be negligent, but that certainly wouldn't excuse a robbery, would it?
Sep 22, 2016, 10:55 am
#39
Join Date: Oct 2013
Posts: 1,322
@AHK --
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
Sep 23, 2016, 7:02 am
#40
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Join Date: Oct 2009
Location: Land of the parrots and parrotheads
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Thought we were talking Safe SOX here. You may be technically correct, but then Wells Fargo rolled up revenue illegally obtained through fraud into its financials. Would that not be misstating revenue and profits?
As they said in Rome about Julius - we come not to praise Wells Fargo, but to bury it.
When Ethos fails us and logos fails us, it is time to rely on pathos, arm the peasants with rotten cabbages and go after Wells Fargo's CEO, John Skunk.
As they said in Rome about Julius - we come not to praise Wells Fargo, but to bury it.
When Ethos fails us and logos fails us, it is time to rely on pathos, arm the peasants with rotten cabbages and go after Wells Fargo's CEO, John Skunk.
@AHK --
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
Sep 29, 2016, 3:38 pm
#41
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Join Date: Oct 2009
Location: Land of the parrots and parrotheads
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Hi Tuphat -
Found someone who knows Sarbanes-Oxley better than I:
Harvey Pitt, former chairman of the SEC, told CNNMoney it's "clearly against the law" for a company or executive to "suppress whistleblowing." He cited Sarbanes-Oxley, Dodd-Frank and other statutes that make this "unambiguously clear."
Guess I'll be selling popcorn when management gets their necktie party.
Found someone who knows Sarbanes-Oxley better than I:
Harvey Pitt, former chairman of the SEC, told CNNMoney it's "clearly against the law" for a company or executive to "suppress whistleblowing." He cited Sarbanes-Oxley, Dodd-Frank and other statutes that make this "unambiguously clear."
Guess I'll be selling popcorn when management gets their necktie party.
@AHK --
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
You don't seem very familiar with Dodd-Frank. Read it closely, all of the statutory language relates to FINANCIAL REPORTING, not to operational or legal irregularities. This fiasco -- and I agree it's a fiasco -- doesn't have anything to do with financial reporting; the penalty, etc. is immaterial to WFC's financial statements. Suggest you be more precise in your analysis and commentary.
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company's internal control over financial reporting; and a statement that the registered public accounting firm that audited the company's financial statements included in the annual report has issued an attestation report on management's assessment of the company's internal control over financial reporting.
Sep 29, 2016, 7:54 pm
#42
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 6,580
This thread has gone off topic and is not relevant to Manufactured Spending. Those who are OMNI-qualified may continue the discussion in the thread in OMNI/PR.