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Wells Fargo Scandal Summary

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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 …show more content…

The then CEO John Stumpf was forced to resign following insurmountable political and public pressure. Federal prosecutors also issued subpoenas and congressional hearings were held, for which then CEO John Stumpf attended. Additionally, on February 21, 2017, Wells Fargo terminated four high level executives involved in the scandalous news. The SEC’s investigation consists of warrants against bank executives for possible violations of GAAP principles and the Sarbanes-Oxley Act for inaccurate accounting practices. The SEC will probe possible violations of employee whistleblowing protection under the Sarbanes-Oxley and Frank-Dodson Act. Lastly, the SEC will scrutinize any securities fraud that may have been committed as a result of withholding private information (insider trading) to investors due to possible accounting malpractice. Currently, the SEC and Department of Justice results are still pending the ongoing investigation. Tomi Kilgore of MarketWatch reported “Wells Fargo investigation into sales practices should be completed before the April 2017 shareholder meeting.” Likewise, Wells Fargo responded following the mandates of the Office of the Comptroller of the Currency by opening …show more content…

Wells Fargo commenced an extensive television advertisement campaign to reestablish confidence and its public image. It intensified its ads in newspapers and established a presence in major sporting events showcasing its signature horse-drawn carriage ad. According to Mark Folk, a Wells Fargo spokesman, “the advertising reiterates Wells Fargo’s commitment to customers and the steps we are taking to move forward and make things right.” Class action lawsuits have erupted across the country from enraged customers; however, these have been quickly struck down due to mandatory arbitration clauses Wells Fargo customers are required to sign as part of new account opening agreements. Wells Fargo has filed motions for courts to defer any class action lawsuits to arbitration since these arbitration agreements are typically binding and are resolved on a case by case

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A. BWO will likely be able to prove that Chigurh was terminated for a legitimate business reason either because he held a management position or for the financial factors associated with fulfilling the agreement with Wells. An employer may terminate an employee for good cause under the WDEA. § 39-2-904(b). Good cause is defined as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.” § 39-2-903(5).

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Paying this amount alone would greatly have decreased the profitability of BWO, and coupled with the possibility of having to pay Wells an additional $100,000 for the full market value of his former stock, the only reasonable choice was to reinstate Wells as executive

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Eileen Foster was the Executive Vice President of Fraud Risk Management at Countrywide, and later served in the role of Senior Vice President of the Mortgage Fraud Investigation Division at Bank of America after the two companies merged (Foster, n.d.). It was her responsibility to investigate mortgage origination fraud and reporting suspicious activity to regulators and the company’s Board of Directors. After several years of seeing a lot of suspicious activity and blatant acts of fraud she found that the company was playing party to this activity. Any employee who reported fraud and wrongdoing to Employee Relations were being transferred, demoted, harassed or terminated. When Foster reported her concerns to Countrywide’s Internal audit to investigate, the company not only chose to conceal her allegations from Bank of America, but it also directed employee relations to investigate Foster for wrong doing.

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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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337 Words | 2 Pages

It provides financial services to California. The Name of initial board of directors of the Company were Wells, Fargo, Johnston Livingston, Elijah P, Edwin B. Morgan, James McKay, Alpheus Reynolds, Alexander M.C. Smith and Henry D. Rice. The Company faced the first

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I am filing a complaint against United Bank, 129 Main Street Beckley, WV 25802. Former United Bank Vice President MIchael Farris, and a senior United Bank official at United Bank 's Parkersburg branch, engineered a fraud-for-profit at the Beckley branch. Mr. Farris, and other United Bank employees perpetrated the criminal enterprise via HELOC 's. United Bank continued Beckley 's criminal enterprise, after Judge Irene Burger, sentenced, United Bank Vice President Roy L. Cooper, to a five-year prison sentence. Mr. Cooper 's charges included aiding and abetting mortgage fraud, On December 28, 2007, Former United Bank Vice President Michael Farris attached coterminous mortgages on real estate I litigated--since June 2004.

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It would seem the government did not fail to prosecute the executives responsible for the mortgage fiasco. “The Justice Department has an ethical obligation not to bring cases unless they have a better than 50% chance to convict. They argued the merits of each case and always came up short of the evidence necessary for a successful conviction. Greed is not a crime.” (Henning, 2015) The Assistant attorney general Lanny Breuer was not confident in his ability to prove criminal intent and therefore has not filed charges.

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The "Treaty of Omaha," marked the transfer of control over the revitalized Wells Fargo Bank. Wells Fargo's express service ended in 1918 with the merger of the three big express companies forming the American Railway Express. In 1967 Wells Fargo, together with three other California banks, introduced a Master Charge card to its customers as part of its plan to succeed. Wells Fargo’s vision and values have always been to help customers succeed financially, and they have done this by reinventing themselves over and over again. The red and gold Concord stagecoach is Wells Fargo's corporate symbol.

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1) -During the Great Recession Wells Fargo targeted black people and convinced them to take out subprime loans. Such actions lead to the result of Wells Fargo being sued in 2010 for discrimination and a year later settling the suit paying more than 174 million. -The early economy was built on slave labor. Not only did slaves build the Capitol building, but they built the White House too.

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Wells Fargo has been in the news lately. Thanks to the scandal surrounding reports that bank employees have opened accounts without client’s approval. As a result, Wells Fargo’s share price has taken a beating, losing 14% of its market value for the year. Berkshire Hathaway is the bank’s biggest shareholder with almost 10% stake. Its famous CEO, Mr. Warren Buffett is known as a long-time WFC fan, even praising the bank’s untarnished ethical culture.

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Lack of trained investigators bias against tipsters, and no communication between offices and investigators led to the failure of the later investigations. In the first investigation of 2005, when the supervising investigator discovered Madoff was not using the Barclays bank, he ignored the information. He did not send it to the investigators (pg. 144), who could have used that information as proof Madoff was lying. The investigators not knowing about the 2003 investigation is another example of the lack of communication between the offices of the SEC. The biggest failure in the investigation in November 2005 was the SEC’s failure to follow up on the document Madoff submitted with the list of DTC accounts.

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498 Words | 2 Pages

By consistently making progress in these particular areas, and ensuring that we have a high customer satisfaction with our customers our success will lead to product sales. Prospective customers are often times persuaded to purchase or not purchase products and services from reviews (pass and/or present), family, friends, or social media in which sometimes the information may be inaccurate. We want our customers to feel as though we understand every financial need that may be encountered before and after any financial review. Wells Fargo is an evolving company of which we believe great customer service always leads to sales, but sales hardly ever lead to great customer service. At all times, we look for efficient and effective ways to minimize our expenses, as the impact of this not only business our company, but our customers.

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800 Words | 4 Pages

Goldman Sachs: Power and Peril I am strongly agree with the action of SEC. The main problem of any financial and banking firm is Asymmetric Information (Adverse Selection and Moral Hazard). Adverse Selection is the risk before the money transaction while Moral Hazard is risk after money transaction. But before going directly into subject, we will understand the element involve in the case.

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744 Words | 3 Pages

Introduction Prior to the enforcement of Regulation Fair Disclosure (FD), many public companies are revealing important nonpublic information to the institutional investors or financial analysts, before disclose such information to the public. When this happened, those people who gain insight information can take advantage of others by buying or selling shares of the company beforehand. As a result, on October 23, 2000, the Securities and Exchange Commission (SEC) introduced the enforcement of Regulation Fair Disclosure (FD) to prevent the selective disclosure of information by publicly traded companies, which requires public companies to disclose material information as releases to financial analysts or others to the public at the same time. Consequently, insider trading becomes an alternative way by which a firm can passes on private information to financial analysts about the company’s future earnings.

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1179 Words | 5 Pages

Since 2008 the SEC has continued to make reforms and improvements in order to deter another instance like the Madoff fraud. Some of the initiatives that the SEC has taken, are to refurbish how tips are treated, promoting whistleblowing systems, refining fraud detection techniques, and reviving enforcement

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