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Why is it that in such cases, the government reaches for the CEO right away; but when Wells Fargo employees open millions of fraudulent accounts, it's not the C

Why is it that in such cases, the government reaches for the CEO right away; but when Wells Fargo employees open millions of fraudulent accounts, it's not the CEO's fault? If I were to commit identity theft (which is basically what the WF employees did), then I would be facing jail time; why hasn't anyone in WF been charged with criminal fraud yet? Why not the CEO?

M_Grey 10y ago
The CEO has money, connections, and the thin veneer of respectability. The issues involved are not so simple and emotive as the ones relating to sex and minors. You know... the usual bullshit.
- gscott 10y ago
  Plus the person who has him arrested is running for US Senate and sees a free way to get extra press coverage.
  - taternuts 10y ago
    bingo
rhizome 10y ago
The vice lobby is apparently kinda weak.
blazespin 10y ago
Because, get freaking real, there are 267K FTE at WF .. versus backapage probably hires what, maybe a 100 or so? If some % of 267K people are not committing fraud, than I'd want to arrest the CEO for doing some terrible brainwashing.
rayiner 10y ago
You're comparing apples and oranges. The CEO of a small internet company almost certainly has a hand in everything the company does. The CEO of a large corporation has no idea what the line workers are doing.[1] If a bunch of Yahoo employees had gone off and run as sex-trafficking site off Yahoo's servers, they wouldn't go arrest Marissa Mayer. Not because "lobbying" but because that would be stupid and unreasonable. [1] I've done internal investigations at megacorps. When something shady goes down with line employees they hire teams of lawyers just to tell management what the heck is going on inside their own company.
- decilios 10y ago
  Logical answer right here. No conspiracy theories, for once.
- gscott 10y ago
  You are talking about 5,000 current employees being fired and many employees who were fired for reporting it. If he didn't know, then he must not know other things about Wells Fargo that are equally important.
  - twblalock 10y ago
    > You are talking about 5,000 current employees being fired and many employees who were fired for reporting it. If he didn't know, then he must not know other things about Wells Fargo that are equally important. I'm sure that's the case, and I'm sure it's also the case for most CEOs of massive companies. Wells Fargo has more than 250,000 employees and more than 6000 branches -- more branches than any other US bank. There is nobody who knows everything that is going on. It's just not possible. The number of employees fired represents a tiny fraction of the total number of employees -- about 2% or less.
    - Zigurd 10y ago
      It's about 5% of US employees, concentrated in one part of the organization.
      - blfr 10y ago
        Closer to 2%.
        Zigurd 10y ago
        Wells Fargo global headcount is about 250k. Less than half is in the US.
    - JustSomeNobody 10y ago
tn13 10y ago
> Why is it that in such cases, the government reaches for the CEO right away; War on sex is new War on Drugs. By going after the CEO they are setting a precedent. They want to make sure no investor would invest into something that challenges government authority. Wells Fargo CEO will not be touched for the same reason why big banks get bailouts, Hillary clinton is not in jail and Obama is still a president despite killing thousands of innocent people around earth. They are too close to powers.
- GVIrish 10y ago
  > Hillary clinton is not in jail Ugh not this again. Hillary is not in jail because her actions did not rise to the level of criminal prosecution. Look at General Petraeus. He willfully gave highly classified material to his mistress. He got a plea deal and didn't serve any time. So how is it that Clinton who did not intentionally divulge classified material nor put an authorized server on the classified network, now deserves to be punished more harshly than Petraeus? That doesn't make any sense.
  - tn13 10y ago
    You can be a Hillary apologist for the sake of political arguments. The thing is if I had done the exact same thing I would be termed a traitor and put in jail.
- 1024core 10y ago
  > and Obama is still a president despite killing thousands of innocent people around earth. Why not Bush? He's the fucking moron who started it all because he had daddy issues, and killed way more innocents ( > 300,000 ) than Obama??
  - tn13 10y ago
    Obama is just an mechanism. In case of Iraq war I think Bush and a large part of his administration must be jailed.
Buge 10y ago
99% of Wells Fargo's income was not coming from these fake accounts.
- jmulho 10y ago
  It is fine to steal as long as it is only a small percentage of your income?
  - danielweber 10y ago
    When the threshold is to prove in court beyond a reasonable standard of doubt, it's going to be hard to prove that some horrible scheme that was never going to generate money (open a bunch of accounts customers don't know about and won't use, aside from some small amount of fees that will annoy customers) was undertaken deliberately, especially when it would only be a small part of the enterprise.
  - Buge 10y ago
    If it's 99% of your income, the CEO knows about it. If it's a tiny percentage, or none at all, the CEO might not know about it.
dzdt 10y ago
I think Matt Levine's take on this is right on: https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts https://www.bloomberg.com/view/articles/2016-09-09/wells-far.... Senior management wanted employees to do REAL cross-selling to make money, but the metrics were set so high that employees turned to fake accounts to meet the standard. The fake accounts did not benefit the bank in any substantial way: So that's about 2.1 million fake deposit and credit-card accounts, of which about 100,000 -- fewer than 5 percent -- brought in any fee income to Wells Fargo. The total fee income was $2.4 million, or about $1.14 per fake account. And that overstates the profitability: Wells Fargo also enrolled people for debit cards and online banking, but the CFPB doesn't bother to count those incidents, or suggest that any of them led to any fees. Which makes sense: You'd expect online banking and debit cards to be free, if you never use them or even know about them. Meanwhile, all this dumb stuff seems to have occupied huge amounts of employee time that could have been spent on more productive activities. If you divide the $2.4 million among the 5,300 employees fired for setting up fake accounts, you get about $450 per employee. Presumably it cost Wells Fargo way more than that just to replace them. It seems senior management set up a stupid employee incentive program, but were not intentionally involved in the fraud.
- toyg 10y ago
  There's still a duty of vigilance.
  - Symmetry 10y ago
    And IANAL but that's a tort, not a crime.
- makomk 10y ago
  Matt Levine just shows that Wells Fargo wanted a paper trail showing that they told employees not to do this. The interesting question is, what happened when whistleblowers told them it was happening anyway? Apparently, the answer is that they fired the whistleblowers. That says everything about what Wells Fargo really wanted, as opposed to what they said to cover their asses. Remember, he's an industry insider with a bias.
a3n 10y ago
Wells Fargo execs have better lawyers, and they went to the same schools as prosecutors, they dress alike, and there is no significant revolving door arrangement between prosecutors and online prostitution enterprises.
djsumdog 10y ago
Kim dot com is facing extradition to a country he has never set foot in, for crimes far less than what Rumsfeld, Cheney and Wolfowitz have done. Justice is a sort of illusion.
- acveilleux 10y ago
  Factually incorrect... Before Mega when has was a Ponzi scheme operator and self-professed super-hacker he posted pictures all the time of his trips around the world in super-yacht, private jets and expensive cars. Including the US.
coldtea 10y ago
Because he plays golf with a lot of politicians at the country club.
choicewords 10y ago
Because bankers are better at committing fraud and hiding their tracks?
themihai 10y ago
Because the CEO of a large bank/group has more leverage and influence than a small internet business.
pbhowmic 10y ago
Even if I were to grant that the Wells Fargo CEO should have been charged with fraud and he was not, that does not mean this BackPage scum-CEO should not have been charged. Two wrongs don't make a right.
forgetsusername 10y ago
>but when Wells Fargo employees open millions of fraudulent accounts Do you think forced prostitution and sex-traficking are equally harmful to society as fake accounts? I know I'm glad that authorities take this more seriously. We need a Godwin's Law for random HackerNews threads that bring up alleged bank CEO crimes.
dragonwriter 10y ago
> Why is it that in such cases, the government reaches for the CEO right away; but when Wells Fargo employees open millions of fraudulent accounts, it's not the CEO's fault? Probably because a corporation like Wells Fargo will have extensive documentation of procedures and training that establishes sufficient evidence that there were efforts to constrain employee behavior to lawful acts in pursuit of the metrics which they ended up maximizing through unlawful acts that it will take a lot of digging, at a minimum, to have a viable case of executive criminal culpability.

M_Grey 10y ago

The CEO has money, connections, and the thin veneer of respectability. The issues involved are not so simple and emotive as the ones relating to sex and minors. You know... the usual bullshit.

gscott 10y ago
Plus the person who has him arrested is running for US Senate and sees a free way to get extra press coverage.
- taternuts 10y ago
  bingo

rhizome 10y ago

The vice lobby is apparently kinda weak.

blazespin 10y ago

Because, get freaking real, there are 267K FTE at WF .. versus backapage probably hires what, maybe a 100 or so? If some % of 267K people are not committing fraud, than I'd want to arrest the CEO for doing some terrible brainwashing.

rayiner 10y ago

You're comparing apples and oranges. The CEO of a small internet company almost certainly has a hand in everything the company does. The CEO of a large corporation has no idea what the line workers are doing.[1] If a bunch of Yahoo employees had gone off and run as sex-trafficking site off Yahoo's servers, they wouldn't go arrest Marissa Mayer. Not because "lobbying" but because that would be stupid and unreasonable. [1] I've done internal investigations at megacorps. When something shady goes down with line employees they hire teams of lawyers just to tell management what the heck is going on inside their own company.

decilios 10y ago
Logical answer right here. No conspiracy theories, for once.
gscott 10y ago
You are talking about 5,000 current employees being fired and many employees who were fired for reporting it. If he didn't know, then he must not know other things about Wells Fargo that are equally important.
- twblalock 10y ago
  > You are talking about 5,000 current employees being fired and many employees who were fired for reporting it. If he didn't know, then he must not know other things about Wells Fargo that are equally important. I'm sure that's the case, and I'm sure it's also the case for most CEOs of massive companies. Wells Fargo has more than 250,000 employees and more than 6000 branches -- more branches than any other US bank. There is nobody who knows everything that is going on. It's just not possible. The number of employees fired represents a tiny fraction of the total number of employees -- about 2% or less.
  - Zigurd 10y ago
    It's about 5% of US employees, concentrated in one part of the organization.
    - blfr 10y ago
      Closer to 2%.
      - Zigurd 10y ago
        Wells Fargo global headcount is about 250k. Less than half is in the US.
  - JustSomeNobody 10y ago

tn13 10y ago

> Why is it that in such cases, the government reaches for the CEO right away; War on sex is new War on Drugs. By going after the CEO they are setting a precedent. They want to make sure no investor would invest into something that challenges government authority. Wells Fargo CEO will not be touched for the same reason why big banks get bailouts, Hillary clinton is not in jail and Obama is still a president despite killing thousands of innocent people around earth. They are too close to powers.

GVIrish 10y ago
> Hillary clinton is not in jail Ugh not this again. Hillary is not in jail because her actions did not rise to the level of criminal prosecution. Look at General Petraeus. He willfully gave highly classified material to his mistress. He got a plea deal and didn't serve any time. So how is it that Clinton who did not intentionally divulge classified material nor put an authorized server on the classified network, now deserves to be punished more harshly than Petraeus? That doesn't make any sense.
- tn13 10y ago
  You can be a Hillary apologist for the sake of political arguments. The thing is if I had done the exact same thing I would be termed a traitor and put in jail.
1024core 10y ago
> and Obama is still a president despite killing thousands of innocent people around earth. Why not Bush? He's the fucking moron who started it all because he had daddy issues, and killed way more innocents ( > 300,000 ) than Obama??
- tn13 10y ago
  Obama is just an mechanism. In case of Iraq war I think Bush and a large part of his administration must be jailed.

Buge 10y ago

99% of Wells Fargo's income was not coming from these fake accounts.

jmulho 10y ago
It is fine to steal as long as it is only a small percentage of your income?
- danielweber 10y ago
  When the threshold is to prove in court beyond a reasonable standard of doubt, it's going to be hard to prove that some horrible scheme that was never going to generate money (open a bunch of accounts customers don't know about and won't use, aside from some small amount of fees that will annoy customers) was undertaken deliberately, especially when it would only be a small part of the enterprise.
- Buge 10y ago
  If it's 99% of your income, the CEO knows about it. If it's a tiny percentage, or none at all, the CEO might not know about it.

dzdt 10y ago

I think Matt Levine's take on this is right on: https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts https://www.bloomberg.com/view/articles/2016-09-09/wells-far.... Senior management wanted employees to do REAL cross-selling to make money, but the metrics were set so high that employees turned to fake accounts to meet the standard. The fake accounts did not benefit the bank in any substantial way: So that's about 2.1 million fake deposit and credit-card accounts, of which about 100,000 -- fewer than 5 percent -- brought in any fee income to Wells Fargo. The total fee income was $2.4 million, or about $1.14 per fake account. And that overstates the profitability: Wells Fargo also enrolled people for debit cards and online banking, but the CFPB doesn't bother to count those incidents, or suggest that any of them led to any fees. Which makes sense: You'd expect online banking and debit cards to be free, if you never use them or even know about them. Meanwhile, all this dumb stuff seems to have occupied huge amounts of employee time that could have been spent on more productive activities. If you divide the $2.4 million among the 5,300 employees fired for setting up fake accounts, you get about $450 per employee. Presumably it cost Wells Fargo way more than that just to replace them. It seems senior management set up a stupid employee incentive program, but were not intentionally involved in the fraud.

toyg 10y ago
There's still a duty of vigilance.
- Symmetry 10y ago
  And IANAL but that's a tort, not a crime.
makomk 10y ago
Matt Levine just shows that Wells Fargo wanted a paper trail showing that they told employees not to do this. The interesting question is, what happened when whistleblowers told them it was happening anyway? Apparently, the answer is that they fired the whistleblowers. That says everything about what Wells Fargo really wanted, as opposed to what they said to cover their asses. Remember, he's an industry insider with a bias.

a3n 10y ago

Wells Fargo execs have better lawyers, and they went to the same schools as prosecutors, they dress alike, and there is no significant revolving door arrangement between prosecutors and online prostitution enterprises.

djsumdog 10y ago

Kim dot com is facing extradition to a country he has never set foot in, for crimes far less than what Rumsfeld, Cheney and Wolfowitz have done. Justice is a sort of illusion.

acveilleux 10y ago
Factually incorrect... Before Mega when has was a Ponzi scheme operator and self-professed super-hacker he posted pictures all the time of his trips around the world in super-yacht, private jets and expensive cars. Including the US.

coldtea 10y ago

Because he plays golf with a lot of politicians at the country club.

choicewords 10y ago

Because bankers are better at committing fraud and hiding their tracks?

themihai 10y ago

Because the CEO of a large bank/group has more leverage and influence than a small internet business.

pbhowmic 10y ago

Even if I were to grant that the Wells Fargo CEO should have been charged with fraud and he was not, that does not mean this BackPage scum-CEO should not have been charged. Two wrongs don't make a right.

forgetsusername 10y ago

>but when Wells Fargo employees open millions of fraudulent accounts Do you think forced prostitution and sex-traficking are equally harmful to society as fake accounts? I know I'm glad that authorities take this more seriously. We need a Godwin's Law for random HackerNews threads that bring up alleged bank CEO crimes.

dragonwriter 10y ago

> Why is it that in such cases, the government reaches for the CEO right away; but when Wells Fargo employees open millions of fraudulent accounts, it's not the CEO's fault? Probably because a corporation like Wells Fargo will have extensive documentation of procedures and training that establishes sufficient evidence that there were efforts to constrain employee behavior to lawful acts in pursuit of the metrics which they ended up maximizing through unlawful acts that it will take a lot of digging, at a minimum, to have a viable case of executive criminal culpability.