As all this came to fruition, the bank was penalized with $185 million dollars in fines and other penalties by county and federal organizations (Blake, 2016). On top of getting slapped with millions of dollars worth of fines, Wells Fargo fired 5,300 employees that may have been involved in the scandal (Blake, 2016). Some of Wells Fargo’s top executives where asked to step down in court proceedings as well as in other meetings with federal agencies. There have also been several lawsuits filed against Wells Fargo by customers and former employees of the company that feel that they were wronged and bombarded with threats. Thankfully, this scandal did not affect most of Wells Fargo’s clients. However, there were some unfortunate people that had
Well just one I know of and that is Wells Fargo. A civil law suit was filed by the attorney for the City of Los Angeles. The suit was filed and accuses Well Fargo of unethically treating its employees and customers. The suit claims the Bank of setting nearly impossible sales goals for its employees. Which enticed them to use fraudulent ways for meeting the big goals. There have been several former and even present Wells Fargo employees that have come forward to tell their experience of the huge pressure from the bank. The employees used unethical fraudulent means to achieve these nearly impossible sales goals. They did this by opening unauthorized customer accounts, giving out illegal credit cards with lines of credit. They even went as far
I chose Chick fil a for the Code of ethics because chick fil a is a popular fast food restaurant that serves the best quality, and customer service against the big top competitors that have been in the industry for a longer period of time. I do not work for Chick fil a so I thought it would be interesting to learn more about the company since i frequently dine there.
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
This is a cautionary tale of how corporate crime can cause severe harm. The shareholders were prevented by those perpetuating the fraud from selling while the stock was falling, while at the same time they moved their money out of the company. The final outcome was that the perpetrators being Jeff Schilling CEO, Ken Lay, and chief financial officer Andrew Fastow each received hefty sentences. According to CNN, Skilling was originally sentenced to 24 years, the longest sentence of any Enron perpetrator, and has been incarcerated in the federal prison system since his 2006 conviction. He had been facing a release date of Feb. 21, 2028,” (Smith). Ken Lay died before he could be sentenced and Andrew Fastow was released early as a result of a plea
Wells Fargo responded to the scandal by firing 5,300 low-level employees. However, the problem was much bigger than that. After numerous reports to the ethics line, it is almost certain that Wells Fargo officials had some knowledge of the scandal. Additionally, the inaccurate U5 forms “...confirm that Wells Fargo had ample information about the scope of fraudulent sales practices” (Cowley). Senator Elizabeth Warren “…publicly condemned [CEO John Stumpf] for his ‘gutless leadership’” in preventing and handling corruption within his company (Egan, Wattles, and
It is essential for individuals and those representing an organization to understand what is an ethical dilemma. Wells Fargo financial corporation was involved in a dramatic ethical issue due to millions of unauthorized bank account openings. As explained in The PLUS Ethical Decision-Making Model, “many organizations battle to develop a simple set of guidelines that make it easier for individual employees, regardless of position or level, to be confident that his/her decisions meet all of the competing standards for effective and ethical decision-making” (n.d). The Wells Fargo scandal is evident prove that employees lacked ethical judgment and management supervision. The seven ethical decision-making steps foster straightforward thinking that
According to the Deontological perspective on ethics least some acts are morally obligatory. Under this approach, an action is considered morally bad because of some characteristic of the action itself, not just because the product of the action is bad. Wells Fargo unethical practices demonstrates unethical behavior, under deontological ethical theories as its employees duty to operate in an honest and fair fashion , in providing services to the public. Wells Fargo codes of conduct does not permit sales practices of these sort, therefore the employees who participated in these practices made unethical decisions. Unfortunately there was a wrong-doing on a massive scale. The acts of unethical behavior were conducted by both the employees and management. The management initially failed to publicly acknowledging the problem that raise concerns for the shortcoming of their inadequate controls to detect the fake
Unethical behaviors in business affect everyone since you either work in the field or are a consumer of its services. Unfortunately, almost every company usually has individuals who act unethically whether it is for their personal benefit or for the sake of the company they work for. Unethical behaviors in business might be as simple as using company property or funds for personal gain to inside trading and financial fraud. According to The Chartered Institute of Management Accountants, nearly one third of business professionals feel pressured to compromise their ethical standards and are increasingly pushed towards unethical behavior. Moreover, “misconduct is common and accepted by business services professionals, the integrity of entire economic systems is at risk”, states Jordan A. Thomas, partner and chair of the Whistleblower Representation Practice at Labaton Sucharow law firm. In fact, making money at any cost is all what matters, while doing what is right and abiding by the law is not. That said, as a corporate finance student and a business administration major, it is as interesting as important for me to learn about what is considered as unethical in business, in addition to who is enforcing the federal securities laws, proposing securities rules, and regulating the securities industry.
Rights and Duties - Everyone has rights to do some things and to be free of some things, and everyone has duties not to violate others’ rights.
The key ethical issues that were presented in this case study were quality control, lack of customer care, responsiveness, and harming the customer. The Johnson and Johnson case may have been seen as a turning point due to many things the company did right. However, there were many ethical issues in this case which will be explored more throughout this paper.
Ethical decision-making process are influenced by both individual and environmental characteristics, as well as an interaction with the cognitive process (Cooper, 2012). For every public official whose loyalty is to himself, his organization, and the public, the ethical decision-making process is dynamic, it is not constant, it involves a process of recognizing the problem and moving through the course of action towards finding a possible solution. It is contingent upon several factors. There is no one-size-fits-all for every situation, but the course of action is determined by the individual and environmental factors involved and the ethical character the public official has built over time.
This task analysis the issue of ethics in accounting and finance as discussed in the International Journal of accounting and finance. Currently, ethics of any firm is an important topic due to the numerous scandals that have taken place in different countries which have resulted in damage to the economy and society. These scandals have made the morality of accountants and businesspeople. The main contributors of business ethical standards are the accountants. The accounting profession has a duty to play so as to reduce the corporate scandals. They should make sure that there is proper financial management, quality audit, ethical standards improvement and that the governance regimes are strengthened
In comparison to my previous article on Woolworths’ unethical practice, they focus more on the quality of their products and good citizenship. This results in Woolworths attracting a different consumer and target market and indirectly ensures that their sales remain sustainable. Employees need to constantly be reminded on the company’s code of ethics and make sure that they meet the standards that the company