Take it to the Bank

Wells Fargo is (unfortunately) my bank.  On Thursday, I went over to their offices in Hopkins, and demanded to see every account opened in my family's name.  They complied, very quickly, and after I confirmed I wasn't abused by my own bank, I expressed my disgust at having to actually come to the bank to confirm the bank hadn't defrauded me, a customer!  The banker, a nice enough guy, said, what I presume to be, the Wells Fargo ordered standard response; "We got rid of the 5300 bad apples!"  I went OFF on him for saying something which 1) was ignorant, and 2) assumed I was a complete moron.

In case you missed it, what Wells Fargo did, in the post-2008 age of responsible banking, was disgusting.  Wells Fargo wanted to continue to look like a growing financial institution, but the problem for them was the only way you grow as a bank is to get additional new customers, or to have your existing customers expand the number of accounts they individually have.  Wells Fargo's solution was to start, illegally, opening up accounts in their own customer's names.  These accounts were opened without the knowledge of their customers, and were usually closed before anything bad happened, but in many cases, penalties and overdraft charges were placed upon the unknowing customers.  Wells Fargo was basically stealing from their own accounts.  The expanded account base made it seem like Wells Fargo was expanding their customer base, and it allowed them to keep up with Wall Street expectations, falsely inflating the stock price, and allowing the bank's executive class to steal millions of dollars in fraudulent gains.

Let me take a quick moment to explain the modern Wall Street.  Used to be, if you were a publicly traded company on a Wall Street market, your stock price was directly tied to the quarterly performance of the company.  If a company had a good quarter, their stock prices went up.  If they had a bad quarter, the company's stock went down.  The stock market was meant to be a marketplace for wealthy investors to find up and coming businesses who might give them a return on their investment.  Occasionally it was a great return, but most of the time is was luke warm at best.  The company's success was generally tied to the health of the US economy as a whole, and the quarterly internal company reports.  The stock market was never intended to primarily be a 'get rich quick' scheme.  There were always some people who'd gamble on future earnings, but it was considered to be reckless and unwise to gamble money like that.

Things started changing in the 1970's.  A new mentality started to arise; the Wall Street speculators insisted they were the REAL geniuses, and THEIR bets on future corporate earnings should be the standard the company was held too.  When the company achieved THEIR expectations, the company was rewarded, but when a company didn't acheive THEIR expectations, even when the company had a very profitable quarter, the company was labeled a failure, needing to be punished.  Many companies had great years, but because it wasn't as profitable as the speculators thought it should be, rightly or wrongly, the company suffered overall.  That's insane.  It's very Las Vegas:  I'm playing 21.  I have 17 and I tell the dealer to hit me, because I'm convinced the next card is a 4 or lower.  It's a Jack.  I then insist I didn't lose, rather the dealer is the real bad guy for not giving me the card I wanted.  It's a system based on false standards, very easily manipulated.  If you're a dishonest executive, all you have to do is find out where the speculators think your company should be, and then manipulate the profit margins of your own company to exceed it; instant millions in your stock portfolio.

Wells Fargo executives openly encouraged the fraudulent accounts.  They set quotas for their employees, with Wells Fargo CEO John Stumpf encouraging 8 accounts per customer.  The bank told their workers to make it happen, OR ELSE!  It's hard to determine where exactly the 'open fraudulent accounts' order came from, but considering the amount of money the executives made from a manipulated stock price, it clearly points to the executives themselves, and one in particular, Carrie Tolstedt, the executive head of the division where the fake accounts originated.  Carrie, when the reality of her illegal corporate manipulation was about to come to light, was able to retire before facing the music.

Let me go back to why I went off on the poor banker for insisting the bank was better because they got rid of the 5300 bad apples.  THIS WAS THEFT!  The executives not only stole money from their own customer base with their unethical practices, they did it so the bonuses and stock options they received would be worth 3 to 4 times more than they should've been. The 5300 low level employees who opened these fraudulent accounts did so under orders to do so, so to punish them, under the guise of 'we got the bad apples' is insanely short sided.  For goodness sake, Wells Fargo openly punished employees who tried to report the fraudulent behavior, complaints which clearly were seen by the executive class.

The employees weren't ordered to do this by a single low level manager, or his manager, or his manager.  5300 employees don't do this kind of manipulation without commands from the executives.  For Wells Fargo to imply they've solved the problem, by firing the employees whom they knowingly ordered to defraud their own customers, is an empty, comical solution.

We need to have FAR harsher penalties for this kind of white collar crime.  Many people in this country insist a liquor store robber who stole $50 needs to go to jail for 30 years, but when you talk about corporate banking executives stealing hundreds of millions of dollars via entrusted customer money and falsely manipulated stock prices, they shrug.  The executives who participate in this level of crime do so knowing they'll never face any punishment, let alone jail time.  The worst punishment many of these executives will get is a six figure payout from the company.

Carrie Tolstedt, the one executive we can definitively point to as the criminal in this case, will walk away with $124 million dollars in compensation from Wells Fargo.  She's 56 years old.  That means, if she lives to be 96, she'll have to find a way to survive on only 3.1 million dollars per year (if she doesn't make any more money on future stock value or interest).  If that wasn't tough enough for poor little Carrie, depending on her employment and retirement agreement, she might also have to live in a house paid for by Wells Fargo (THE SHAME!).  She might have multiple cars and a vacation home included as part of her executive class freebies.  All her monthly bills are probably covered for a few years, a common high end executive perk, and her gold plated health care plan for her and her family is likely covered for the rest of her life.  She'll likely have some sort of travel benefit, where Wells Fargo will cover her first class flights forever.  She'll still likely have her free exclusive corporate country club membership, her high end health club membership and access to the Wells Fargo tickets for every sporting and arts event her family wants to attend (in the luxury suites, of course!).   Wells Fargo might have even agreed to cover all of her family's high end education expenses, all the way through college.  But I'm sure she's learned her lesson.  AND THIS IS THE WORST THING THAT WOULD HAPPEN TO HER!  Is it any wonder we continue to have massive corporate fraud, perpetrated by a greed worshipping executive class?

We need to walk into Wells Fargo and grab Stumpf, Tolstedt and every executive who might have had a whiff of this fraud, drag them out by their short hairs and throw them into prison for the rest of their freaking lives!  They need to be made an example of.  They need to go to jail for violating the one thing a bank can't, the accounts of their own customers.  They need to go to jail for ordering their low level employees to break the law, and then acting like the low level employees came up with such a grandiose fraud on their own.  They need to go to jail for so being so brazen; for allowing the guilty parties to get their ducks in a row before the public became aware.  They need to go to jail because they are common criminals.  They need to go to jail because they stole millions of dollars.

Wells Fargo has historically wrapped their product within an image of a stagecoach riding the west, evading thieves and robbers, as they care for the money their customers have entrusted with them.  The updated version of their image should have the robbers and thieves actually holding the reins and driving the stagecoach.