Sep 30, 2016
Learn why the scandal at Wells Fargo is even worse than you’re hearing.
Have you checked out the Creating Wealth podcast yet with Jason Hartman? It’s full of amazing information and over 700 podcasts about real estate investing. If you like this podcast, you’ll like that one too. http://bit.ly/wealthpod
It’s listener question Friday and one of our listeners asked:
Do you think the penalties were big enough for Wells Fargo?
The media reports the Wells Fargo fraud as “you received an extra account.”
Ah no, that’s not what happened.
Money was taken out of accounts without customer permission to create bogus accounts. Fees were charged in the new accounts. Loans were generated without asking, effecting credit scores negatively.
Senate Banking Committee hearing last week into the bank’s sales tactics, which earlier resulted in a $185 million fine and regulatory action. During his appearance before that panel, Mr. Stumpf and the bank were roundly criticized for firing 5,300 employees over five years, yet taking no action against top executives. As many as two million accounts were opened using fictitious or unauthorized information.
Clients of mine have found that they have 2 - 3 more accounts than they thought they had. They aren’t showing up on the computer.
One person lost a business loan because of Wells Fargo.
The first class action lawsuit has been filed. IMO, much more will come of this.
No executive in the C-suite has lost their job. Only employees doing what they were told.
They did announce millions of dollars in stock options would be forfeited.
CEO John Stumpf to forfeit $41 million in unvested equity awards, forgo salary during investigation; former retail banking head Carrie Tolstedt to forfeit $19 million in unvested equity awards
The female exec in charge is retiring with over $100 million.
The CEO has not taken responsibility, but will give back $40 million in options.
There are reports by whistleblowers that they were fired for reporting illegal practices.
The illegal activities weren’t even caught by Wells Fargo auditors! It was caught by a reporter. This has continued, undetected by senior management, so they say, for several YEARS.
This is THE most egregious act of fraud I have ever seen in my life. The harshest penalties should be charged for people who take money out of your account without authorization. This has gone on years after they caught it. I strongly suggest you close your account if you bank there and move to a credit union or small town bank with more integrity.