There's a lot more things than that you don't get bro.

Why would Stumpf want to encourage this behavior or to remain ignorant to it? Neither seem beneficial to him.

"It's in the public record"

Regardless of the higher ups knowledge and intent, the incentives system created by capitalism and consumerism are obviously wack, destructive and easily corruptible, but the biggest problem with it is the State's complicity and tolerance.

There's little calculation to Trump. He's an impulsive goof imo

This is anathema to Johnson's entirety

I'm more on the Pwn_Master side of this argument.

Creating dummy accounts for customers and charging them fees based on services they don't need in order to hit sales incentives is so clearly black and white fraud there is no chance anyone at any real seniority would allow it to happen. If it is true they only received 400k in revenue from it then its even more likely to have never penetrated into upper management.

It is one thing to do whatever it takes to hit certain growth numbers, but when you are straight up cheating to get there, that is something that you only do if you are desperate and completely unethical. Once you start talking about people making 300k+ a year you are very very unlikely to find the type of desperation necessary to make this scam work.

Larry, you need to have a talk with Riverman about how consumer banking works

CDL, let us consider a bird's eye view concept before addressing specifics.

There's this concept of presumption. In law, sometimes the wrongdoing is presumed to have occurred, other times the burden is upon the complainant to make an adequate showing that wrongdoing occurred.

In this debate, you have determined that Stumpf should be presumed not to have participated or to have had knowledge of the fake accounts scam, others are arguing that the presumption cuts the other way.

It would be beneficial to this discussion to talk about why you've taken that position before you get worked up and go HAM about "insane" regulation, etc.

+++++

On a separate note, there needn't be a Dodd-Frank or other securities regulation clause or law specifically outlawing fake signatures. That's already criminal forgery and numerous other things. It's illegal, and gives rise to liability anyway. Your observation about that a few posts back was a profoundly strange red herring.

Agree. And to this end it doesn't make sense for the CEO of a bank the size of Wells Fargo to spend his time on non-revenue generating accounts opened at the branch level for individuals.

Also, regardless of who knew what when, 5,300 individuals do not independently and spontaneously commit the exact same act of fraud of their own volition and ingenuity. That is (functionally) impossible.

He's the CEO. He's the captain. He's in charge. If he didn't know about a 5300 person fraud that is costing the company hundreds of millions in fines / penalties then he is incompetent or doesn't want to know.

1% is a huge, huge number and would easily show up in any due diligence / internal reporting / fraud detection, if they were into that sort of thing.

If you cared, at all, about discovering employee fraud, and you missed millions of instances of it, that's pretty pathetic.

It's pretty telling that Wells Fargo took forever to investigate this despite being pressured into it, has come out with no instances where they caught a single individual and fired them, have done very little to make this right by their customers, etc.

They (senior execs, C-suite, BoD folks), just don't give a ****, and why should they, they're still gonna walk away rich as ****.

You don't think there's laws against forgery?

Basically this, I agree with Thayer's post but libertarians aren't into reforming the regulatory structures we have so they actually work, so much as removing them altogether.
This strikes me as a charmingly optimistic view of the character of banking executives.

Ooh, ooh, pick me.

Hoya, on the signature thing I agree. Its illegal and clearly criminal to the point that even a "$15/hr branch employee" should recognize that it is illegal and refrain from doing it. Anyone who forged a signature should have known they were doing wrong.

My argument on the presumption side of things is that I can't see why he would have known before he claims to have. Sure its bad optics to have been ignorant to the whole ordeal, but that's it. Its perfectly reasonable to think the CEO was ignorant to such small accounts at a branch level. If he didn't know about some fraudulent $35B institutional account then that's a whole different story.

However, if he knew and didn't do anything or even worse orchestrated this from the top then of course he should be fired. In that instance he should absolutely also be criminally charged.

I think that, given that the incentives for the fraud are clear to lower level employees there really isn't a clear incentive for Stumpf or other high level employees. Stumpf and the high level executives set quotas because these accounts generate $x in fees which translate to $y of profits on average. However, the dummy accounts were not leading to those profits because they were fraudulent and thus it doesn't make sense to want them to even exist.

Given these incentives and the fact that he has limited time to do his job, I don't see why we should presume that he had knowledge of this fraud as it was happening.

Why can't that happen? Fear of losing job + a perverse incentive system.

i think the problem is that he's running a firm which has incentive structures in place such that 5500 employees committed fraud

its not that he came up with and orchestrated a master plan to open all these fake accounts

http://www.latimes.com/business/la-f...222-story.html

To me this sounds a lot more like a completely unethical and terrible sales culture. These regional bosses probably didn't give a **** if the employees were cheating or not. But the people a few totem pole hops up probably had no idea that actual cheating was happening. They probably though that the ruthless management style of their regional pitbulls was what caused so much cross-selling.

If you are a senior exec and had a manager who was demanding hourly update calls and cracking the whip constantly and making people come in on a Saturday, I think you would expect they hit some pretty high numbers.

It just strikes me as the employees conspiring together to figure out a way to cheat the system and their immediate management not caring. But to say that the people who are now paying huge fees and having to take out page-long advertisements to apologize knew this was happening and was cool seems like a stretch.

I'm going to let everyone play with the presumption issue without my interference, but the red is missing the point to a remarkable degree.

If WF can report account growth, that is great news and generates GOOD VIBES for the stock price. This scam generated account growth. That looks great and generated GOOD VIBES for the stock price. There is, therefore, an inventive to lie about account growth that has nothing at all to do with fees or the mere $400,000 in fines.

And let's think harder about this. WF creates fake accounts. Are you seriously arguing right now that the creation of those fake accounts doesn't make sense as an act of fraud because the fake accounts won't generate money?

They're fake. The goal of the scheme is plainly not to generate fees from the fake accounts. How could the fees from the fake accounts be a meaningful element of the potential scheme to establish two million fake accounts?

What, then, is the point of creating two million fake accounts? The point is ___________________________.

If you want to fire him for having 5500 people who are treated like cattle, then I'm all for it.

Anyone who would run a sales model like this is a piece of ****.

But I really don't think they were complicit in fraud.

As has been pointed out to you many times - he personally made a lot of money off of the growth story WF was able to peddle to Wall St.

Generally that's what's known as a "motivating factor" to most normal people.

Or are we just denying that manipulating numbers to increase stock price ever happens at all?

I think the growth has to do with the fact Wells Fargo made a $20 billion dollar profit last year.

Not that they created a bunch of extra checking accounts for people's grandmas to hit sales quotas.

He was the CEO, his company committed massive fraud.

A society in which CEOs are punished when the company they run commits massive fraud will end up with less massive fraud.

Seems cut and dry to me.

Wall St. doesn't care about profit nearly as much as they care about growth. Once a company's projected growth curve starts to level off, the stock price tanks. Tiny changes in growth produce huge changes in a company's expected revenues 3,5,10 years into the future.

markt obviously reacts positively to fraudulently-inflated customer base growth figures and expects those new customers to generate revenue going forward at a similar/same rate to existing customers, even if extra revenue isn't showing up immediately. that gets baked into the stock price. simple stuff

What I'm getting at is you seem to be concluding that "no smart executive would tolerate banking fraud that doesn't reliably generate fees, therefore no smart executive at WF tolerated this banking fraud because it couldn't reliably generate fees."

Which is cute but ignores that WF's business model is cross-selling of banking products and two million additional accounts gets reported as two million cross-sold accounts out of the pure ether, which is, in parlance you respect, growth.

So like . . . you still sure this thing had no upside and therefore no one beyond a few regional managers had any idea?