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Case Study Wells Fargo

476 Words2 Pages

Wells Fargo’s “Gutless Leadership” Wells Fargo is one of the largest banks in the United States, with “…more than 8,600 locations [and] 13,000 ATMs” (Wells Fargo Today). Millions of Americans trust them with their finances. However, after a federal investigation, Wells Fargo has admitted to opening up to two million accounts without customers’ permission. While this had financial implications for many customers, this scandal most heavily affected Wells Fargo’s low-level employees. Sales employees were faced with unrealistic quotas and enormous pressure from management. In podcast episode “The Wells Fargo Hustle” by Chris Arnold and Robert Smith, former Wells Fargo employee Ashley describes the poor working conditions and illegal activities …show more content…

As employees faced pressure to reach quotas, they found ways to cheat the system. If a customer came in to open an account, the employee would simply make it two or three. The intense pressure placed on employees created an environment that not only rewarded dishonesty and malpractice, but made it necessary to maintain employment. Many employees attempted to report these illegal practices to the Wells Fargo ethics line, but action was never taken and the problem escalated. Many employees who attempted to report the crimes were fired and unable to find work due to a “black mark” Wells Fargo placed on their U5. This is an industry form to document incidents of corruption within bank employees (Arnold and Smith). Wells Fargo responded to the scandal by firing 5,300 low-level employees. However, the problem was much bigger than that. After numerous reports to the ethics line, it is almost certain that Wells Fargo officials had some knowledge of the scandal. Additionally, the inaccurate U5 forms “...confirm that Wells Fargo had ample information about the scope of fraudulent sales practices” (Cowley). Senator Elizabeth Warren “…publicly condemned [CEO John Stumpf] for his ‘gutless leadership’” in preventing and handling corruption within his company (Egan, Wattles, and

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