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Summary Of California V Wells Fargo

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Final Paper Morgan Jameson JS-145 Sec 61 Professor Woods July 1, 2024. The Stipulated Final Judgment in the case of The People of the State of California v. Wells Fargo Bank highlights significant issues within Wells Fargo. Initiated by the Los Angeles City Attorney, the legal action uncovered pervasive systemic issues, most notably the unauthorized opening of deposit and credit card accounts without customer consent. This breach of trust resulted in financial harm and fees imposed on numerous unsuspecting customers, highlighting the profound ethical lapses within the bank. Wells Fargo's crimes underscore the imperative for rigorous oversight to uphold legal standards. The scandal not only revealed the severe consequences of failing to enforce proper regulations, but also …show more content…

At Wells Fargo, employees faced aggressive sales targets and incentives, mirroring the high commissions and culture of greed depicted at Stratton Oakmont in "The Wolf of Wall Street." Similarly, mortgage brokers in "The Big Short" were driven by profits from selling high-risk loans and securities, reflecting broader systemic issues in the financial industry. This relentless pursuit of financial gain created environments where unethical behavior could thrive, as employees prioritized personal and organizational profit over ethical considerations. Systemic flaws were evident across all cases. Wells Fargo prioritized sales and profits over ethical conduct, fostering a culture where fraudulent practices could flourish. Stratton Oakmont operated in an environment of unchecked greed and excess, while "The Big Short" exposed widespread recklessness in the financial system, contributing to a global crisis. These systemic issues highlight the deep-rooted problems within financial institutions that allow such wrongdoing to occur and persist, often with devastating consequences for individuals and the broader

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Ms. Tolstedt decided to retire in July, 2016 when the investigation was moving toward finality. Wells Fargo allowed Ms. Tolstedt to retire and take with her around $125 million in stock options while around 5300 of her former employees are getting fired for their part of the fraudulent activities. The author feels Wells Fargo did an injustice to society and Ms. Tolstedt’s former employees by allowing her to retire and take all of her stock options with her, since she should have been

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In the article Wells Fargo’s Reaction to Scandal Fails to Satisfy Angry Lawmakers it mentions how lower-level employees were mainly affected by this unethical behavior and that more than 5,300 employees had been fired due to the unethical practice. Some employees were fired that did not participate in the unethical practice during the scandal were affected as well as a result of not being able to attain the sale goals. Stated in the article, How The Wells Fargo Phony Account Scandal Sunk John Stumpf, “Two former employees filed a $2.6 billion class action suit, alleging branch workers were unfairly fired when they could not meet Wells' aggressive sales quotas.” Customers also suffered because they trusted this bank and its employees to do their job right and they were taken advantage of.

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According to Fortune, “Executives sought to drive growth by putting undue pressure on its employees to hit sales quotas, and many employees responded by fraudulently opening customer accounts. In most cases these accounts were closed before customers noticed, but in other cases consumers were hit with associated fees or took hits to their credit ratings. The bank was forced to return $2.6 million in ill-gotten fees and pay $186 million in fines to the government. But the biggest hit Wells Fargo will take is to its reputation, as the media and government officials spent much of the year slamming the bank for its fraud,” (Mathews). The victims being the unknowing customers who saw their credit ratings plummet and faced steep financial fees, that were brought about through no fault of their own.

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The Wells Fargo Fake Accounts Scandal In September 8, 2016 the US Consumer Financial Protection Bureau announced that, Wells Fargo is going to pay a combined amount of $185 million fine to the (C.F.P.B.), the Office of the Comptroller of the Currency and the City and County of Los Angeles to settle charges of being engaged in illegal practices of opening two million fake accounts between May 2011 and July 2015. So what exactly happened is that at Wells Fargo employees to reach the sales goals set by the bank executives had open more than 1.5 million deposit accounts and more than 565,000 credit-card accounts without the customer’s consent. Customers were charged fees, had collection agencies calling them due to unpaid fees on accounts

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In the case of Wells Fargo, the organization's cooperate culture pushed aside moral and ethical mindsets in an effort to simply meet the company's goal expectations for opening new accounts. Additionally, ramifications were felt by employees who blew the whistle on the activity through the corporate ethics lines as they were terminated for raising concerns about the organizations business practices. (Eagan, 2017) This aspect of the scandal is still playing out in a the courts as several ex-employees are filing lawsuits because of the actions by Wells Fargo. The organization's management allowed and promoted an environment that lacked ethical behavior and depleted moral standing with the employees.

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Wells Fargo shouldn’t be only one having to pay fines; the employees should also be held liable and pay back the profits each of them made in this scandal. Wells Fargo’s current focused is “training, monitoring, oversight, and compensation structuring” its employees. At this juncture, it is

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As all this came to fruition, the bank was penalized with $185 million dollars in fines and other penalties by county and federal organizations (Blake, 2016). On top of getting slapped with millions of dollars worth of fines, Wells Fargo fired 5,300 employees that may have been involved in the scandal (Blake, 2016). Some of Wells Fargo’s top executives where asked to step down in court proceedings as well as in other meetings with federal agencies. There have also been several lawsuits filed against Wells Fargo by customers and former employees of the company that feel that they were wronged and bombarded with threats. Thankfully, this scandal did not affect most of Wells Fargo’s clients.

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early stages of the scandal, the San Francisco based financial institution was investigated by the local Los Angeles City’s Attorney and California state officials. Preliminary investigations revealed the extent of the fraud and malpractice predated as far back as 2011. As a result, on September 8, 2016, federal investigators followed suit and the Consumer Financial Protection Bureau Agency opened an investigation against Wells Fargo and handed a $185 million penalty to settle the dispute. This settlement would become the largest fine levied in the agency’s history. Of the $185 million, $100 million comprised of fines from the Consumer Financial Protection Bureau (CFPB), $50 million originated from the Los Angeles City Attorney’s Office, and

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The Five Dysfunction of a team, relate to Wells Fargo, and I quickly realized that the cause of this scandal, was a dysfunction of a team and at the same time the cross-selling tactics and strategies that led to this scandal. It was definitely a big oversight under the companies former CEO Mr. Stump. His lack of leadership put all employees under a lot of pressure to keep their jobs and meet their sales goals. After much analyzation of the organization and the former CEO I concluded this was a very dysfunctional team. I can relate to the culture of Wells Fargo after reading, “The Book of the Five Dysfunction of a Team” by Patrick Lencioni.

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The classic novel The Adventures of Huckleberry Finn written by Mark Twain, is filled with problems about religion, alcoholism, education, and most importantly what is morally right and wrong. All throughout this best selling novel, religion is a very strong theme because Huck is trying find what is ethically right and wrong and to get his moral compass facing the right direction. Not only that but he is also faced with the problem of being the son of the town drunk, and all his childhood he has been beat countless times and at one point pap even makes Huck give him the money he had acquired to go buy alcohol so he could get drunk. In hopes of helping Huck have a better childhood, the widow Douglas has adopted him and is trying to civilize

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Wells Fargo, 2015). Los Angeles City Attorney Mike Feuer, who is representing Californians, says “the largest California-based bank encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales” (Reckard, 2015). Wells Fargo reputable organizational behavior is being tested with allegations that jeopardize the institution’s ultimate vision, value, and goals. Wells Fargo’s strict and unrealistic sales quota forced employees to engage in unethical and illegal practices to meet the standards and expectations of the

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1347 Words | 6 Pages

When it comes to the Ethical Decision Model, it does not just pertain to the employees who opened these accounts but also leadership who either failed to realize what was going on or decided to sweep it under the rug by just covertly firing some employees. Wells Fargo did take the first step in recognizing the problem but failed to define it, which explains why these unethical behaviors continued for so many years. When the corporation was initially aware of what was going on, they should have acted immediately and strategized a solution that would dilute the possibility of it occurring again. Instead of defining the problem, which would have foster, a proper solution but company decided to just terminate

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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.

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Under this approach, an action is considered morally bad because of some characteristic of the action itself, not just because the product of the action is bad. Wells Fargo unethical practices demonstrates unethical behavior, under deontological ethical theories as its employees duty to operate in an honest and fair fashion , in providing services to the public. Wells Fargo codes of conduct does not permit sales practices of these sort, therefore the employees who participated in these practices made unethical decisions. Unfortunately there was a wrong-doing on a massive scale. The acts of unethical behavior were conducted by both the employees and management.

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A) Introduction Unethical behaviors in business affect everyone since you either work in the field or are a consumer of its services. Unfortunately, almost every company usually has individuals who act unethically whether it is for their personal benefit or for the sake of the company they work for. Unethical behaviors in business might be as simple as using company property or funds for personal gain to inside trading and financial fraud. According to The Chartered Institute of Management Accountants, nearly one third of business professionals feel pressured to compromise their ethical standards and are increasingly pushed towards unethical behavior. Moreover, “misconduct is common and accepted by business services professionals, the integrity of entire economic systems is at risk”, states Jordan A. Thomas, partner and chair of the Whistleblower Representation Practice at Labaton Sucharow law firm.

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