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Wells Fargo Penalties Since 2000: $22B
- Aeolun 4y agoClearly it's working very well for them. At some point, maybe it's better if they're just penalized into bankruptcy?
- quickthrower2 4y agoThem being the corporation or the employees?
- Aeolun 4y agoI imagine it’d have to be the corporation. Proving any employee did a particular thing wrong is too hard/slow to be worth it.
- vagrantJin 4y agoStaggering. How do they account for this in their financial statements?
- drbig 4y ago"Operating Expenses" /s
- aaaa4444 4y agoYou can take off the "/s"
- quickthrower2 4y agoCan the IRS take off the /s ?
- dividuum 4y agoThey just write it off.
- blippage 4y agoAs Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
- MattGaiser 4y agoThis is generally a problem with employees in general, especially as tenures decline. Sales stuffs the channel with products that are later returned as they get their commission. Or they vastly oversell what the product can do. Engineers rack up tech debt to keep the Scrum Master happy and choose technologies based on how good they look on a resume. HR people pass around crappy or abusive employees to other departments rather than doing the hard work of terminating them. Wells Fargo shareholders evidently don't care that much and a big reason for that is that the average shareholder is probably just a fund of sorts, so it isn't really their money either.
- fxtentacle 4y ago"... so it isn't really their money either." Talk about perverse incentives. Their customers, meaning the people who are directly affected, are like the only ones who don't have any power to influence what happens. And everyone with power to influence the company just isn't affected and doesn't care ...
- MattGaiser 4y ago> Their customers, meaning the people who are directly affected, are like the only ones who don't have any power to influence what happens. They do, but they would need to actually change their spending. That's the other thing. After scandal after scandal after scandal, plenty of people still bank at Wells Fargo.
- tristor 4y ago> After scandal after scandal after scandal, plenty of people still bank at Wells Fargo. It’s not always exactly a choice. Wells Fargo bought my mortgage from a local bank. The only way to change your lender is to do a refinance, which incurs closing costs. Despite several serious WF fuck ups like double and triple charging my mortgage payment, failing to correctly maintain escrow, etc there is literally nothing I could do without losing tens of thousands of dollars until market conditions had changed and enough time made it feasible to re-fi, which I did promptly. The problem with big banks is not just that they’re criminally fraudulent assholes, it’s that they will straight buy your customership on the backend in ways you are locked into. The same thing temporarily made me a Bank of America customer when they just straight bought a local bank chain. I’m now with a credit union and moved everything there, but it’s non trivial to do.
- Mengkudulangsat 4y agoAnecdotally, I rarely hear about China "fining" its egregious corporations, they go straight for the executives. America needs to get its spine back.
- BirAdam 4y agoIn the USA, politicians are bought and paid for by megacorps. They can’t really punish anyone without losing money themselves. In China, politicians are part of the CCP. If they don’t do what the CCP wants they have very serious consequences. Two systems, two very different yet serious problems.
- Joeri 4y agoIf in America politicians are bought and paid for by large corporations, does it mean the country is no longer a democracy? Or is it still a democracy and the blame ultimately lies with voters who vote on corporate-backed candidates?
- BirAdam 4y agoThe USA is an oligarchy, with an illusion of choice.
- sbarre 4y agoHave you ever seen what happens when a non-corporate-backed (i.e. independent) candidate steps up for election? They are almost always out-spent and out-campaigned from all sides because both bought parties want to maintain the two-party system at all costs. There are exceptions of course, but not meaningfully. Blame Citizens United for all this. That decision marked the day the US completely stopped being a "by the people, for the people" country.
- BirAdam 4y agoOne could make the argument that the USA became an oligarchy during the 1896 Presidential election season. McKinley’s campaign was run by Mark Hanna, and the campaign managed to secure funding from Standard Oil as well as various mining companies. This doomed the Bryan campaign. I find it interesting that the McKinley administration launched the US into war against Spain, and the USA has thereafter been continually at war… so first modern campaign finance, modern press involvement, military-industrial complex, and so on. McKinley looks to be the first truly bought and paid for politician in the USA. The rich got what they wanted and the poor were sent to fight and die and slaughter the innocent in a poor nation (the Philippines in this case). Seems startlingly similar to the current state of the USA.
- rixrax 4y agoBut look at Bank of America[0]. 4x that meager $22B of WFC. Or Chase[1], which is only slightly worse than WFC. BK and USB are almost poster childs with only ~1B of penalties each[2][3]. [0] https://violationtracker.goodjobsfirst.org/?parent=bank-of-america&order=penalty&sort=desc https://violationtracker.goodjobsfirst.org/?parent=bank-of-a... [1] https://violationtracker.goodjobsfirst.org/parent/jpmorgan-chase https://violationtracker.goodjobsfirst.org/parent/jpmorgan-c... [2] https://violationtracker.goodjobsfirst.org/parent/us-bancorp https://violationtracker.goodjobsfirst.org/parent/us-bancorp [3] https://violationtracker.goodjobsfirst.org/parent/bank-of-new-york-mellon https://violationtracker.goodjobsfirst.org/parent/bank-of-ne...
- anonu 4y agoIt's viewed as the "cost of doing business"
- throw101010 4y agoAnd a good way for governments to take their share on the violations/crimes these bankers are committing.
- smallerfish 4y ago...and then look at (for example) Charles Schwab, fined "only" $833M in that time period, with over half of that coming from TD Ameritrade, with the offense prior to acquisition. There are much less predatory institutions out there.
- diordiderot 4y agoGross profit for '22 alone was 74,981,000,000 so 29% of one years profit Inflation adjusted Gross profit 2000 was 32,485,000,000
- lotsofpulp 4y agoWhy compare to gross profit rather than profit (net income)? I.e. why ignore fixed costs for this comparison?
- diordiderot 4y agoAren't fines deducted from net profit?
- lotsofpulp 4y agoFines would be part of the expenses that go into calculating net profit. But a business like Wells Fargo with lots of physical locations and staff has a lot of fixed costs. Their operating profit is $80B, but net profit is $20B. I do not see a reason to ignore $60B of expenses when comparing fines to a measure of the business’s performance.
- diordiderot 4y agoFair enough (Or 'touche' or 'I see the validity of your argument' hard to communicate tone through text especially with a multi-lingual userbase)
- yafbum 4y agoIs this even a meaningfully dissuasive amount?
- gigatexal 4y agoMoral of the story: don’t bank with Wells Fargo.
- brianwawok 4y agoSome of us don’t have a choice. I got a mortgage from a local bank. One week after we closed I got a letter that WF now owns my mortgage, and I can send future payments to them.
- voidee 4y agoYeah. I wish there were terms to exclude certain banks when getting a mortgage. WF fines since 2000 should be closer to $100B for all the fraud they’ve committed. Will anything change without jail time? I doubt it.
- gigatexal 4y agoThat’s terrible. My wife banks there and has done so before we got married. It’s a spot of contention for us since she wants us to merge accounts and I don’t want to for obvious reasons.
- charlescearl 4y agoInstead of wasting resources punishing arbitrary capitalists (the next Wells CEO is no doubt biding its time), the state should seize some portion of the bank's operations and use them for the creation of operationally resourced public banks [1]. Then use this as a basis for the creation of plan for responsible community re-investment. As Lenin observed: " It is absurd to control and regulate deliveries of grain, or the production and distribution of goods generally, without controlling and regulating bank operations. It is like trying to snatch at odd kopeks and closing one’s eyes to millions of rubles. Banks nowadays are so closely and intimately bound up with trade (in grain and everything else) and with industry that without "laying hands" on the banks nothing of any value, nothing “revolutionary-democratic”, can be accomplished. " [2] [1] https://www.marxists.org/archive/lenin/works/cw/volume25.htm#1917-ichtci-index https://www.marxists.org/archive/lenin/works/cw/volume25.htm... [2] Collected Works, Volume 25, https://www.marxists.org/archive/lenin/works/1917/ichtci/04.htm https://www.marxists.org/archive/lenin/works/1917/ichtci/04....
- danuker 4y agoNormally, I'm a capitalist. But when large companies get to control every aspect of one's life, and one is practically forced to use a bank, and banks are an oligopoly, I favor state intervention. The money supply, controlled mostly by commercial banks, dictates whether we are in a boom or a recession. Credit scores are instruments of surveillance. Banking policies against certain activities (legal ones) impose de-facto bans on those activities, ostensibly to reduce the risk of illegal activities. As long as banks have enormous power over individuals, and as long as there is little competition, the state must regulate them.
- FredPret 4y agoI've never understood why this ideology is deemed acceptable in polite conversation. If you quoted Hitler in glowing terms, you'd be rightly banished from society. But the much worse Lenin (& friends) is a-ok.
- jcstauffer 4y agoIt seems endemic to the sector. For comparison sake, Bank of America was penalized almost 4X ($83,354,221,356) in the same time period: https://violationtracker.goodjobsfirst.org/summary?parent=bank-of-america&major_industry_sum=&offense_group_sum=&agency_sum=&agency_sum_st=&hq_id_sum= https://violationtracker.goodjobsfirst.org/summary?parent=ba...
- roenxi 4y agoIs it fair to say Wells Fargo's business as usual is more damaging than FTX's collapse?
- somenewaccount1 4y agoNo, it's not. One actually has a valid business with flawed implementation which effected a portion of customers. The other is a Ponzi scheme that stole 100% of assets from 100% of customers. In Wells case, affected customers have legal recourse that can compensate them for their suffering, because the overall business is solvent. In FTX case, you get nothing, nada, zero, zip.
- mtnGoat 4y agoI remember I was about 19, getting into a screaming match with a branch manager about multiple “new accounts” I had opened that were now overdrawn because of fees. Problem was, I had proof the signature wasn’t mine and I was out of the state at the time they were signed. Free days later I get a call asking me to come close my accounts, all these strange accounts went from -$300-500 each, to $5. For years and years people thought I was crazy when I said I don’t do business there and they were scammers, why would a bank steal? lol, here we are two decades later and they are still up to no good. What level of malice must a company site repeatedly teach before regulators actually protect those they are set to protect?
- adharmad 4y agoAt this point, it seems Wells Fargo execs have decided that as a company strategy, these fines are going to be a Opex line item on their balance sheet. Cost of doing business - plain and simple.
- cainxinth 4y agoIt's so common for them that Wells has its lawyers checking into whether they can write it off as a normal business expense.
- jmpman 4y agoThe most disturbing aspect of the last Wells Fargo “issue” is that many employees came forward to HR to raise the issue. Instead of investigating, and acting in the best interest of the customers and employees, HR helped facilitate the deception. The head of HR should have been severely punished. Instead the deputy general council left WF. The rot was much deeper, and nobody went to jail. I’m not aware of any being subject to clawback. These were people who orchestrated the firing of whistleblowers. The U.S. Department of Labor's Occupational Safety and Health Administration found Wells Fargo violated the whistleblower protection provisions of the Sarbanes-Oxley Act. Wells Fargo continues to show up with these headlines. The only way thats possible is if HR is facilitating this effort. Congress needs to expand whistleblower protection to result in criminal prosecution of those who facilitated the whistleblower retaliation. Until then, these violations will continue. Right now, HR is incentivized to thwart the investigations, and get rid of the whistleblowers. Nothing has changed.
- Eddy_Viscosity2 4y agoMaybe more novel punishments, like if you do X, then all senior staff, CEO, board members, VPs, etc are restricted for a period of x years from using private jets, charters, or business class in commercial airlines. If they fly it MUST be in economy class; this applies to both work and personal travel. Let's start taking away the perks. Golf course memberships are next - they can only use lower tier public courses. Next are restaurants and lodgings, 3 stars or lower.