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Wells Fargo Scandal Summary

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early stages of the scandal, the San Francisco based financial institution was investigated by the local Los Angeles City’s Attorney and California state officials. Preliminary investigations revealed the extent of the fraud and malpractice predated as far back as 2011. As a result, on September 8, 2016, federal investigators followed suit and the Consumer Financial Protection Bureau Agency opened an investigation against Wells Fargo and handed a $185 million penalty to settle the dispute. This settlement would become the largest fine levied in the agency’s history. Of the $185 million, $100 million comprised of fines from the Consumer Financial Protection Bureau (CFPB), $50 million originated from the Los Angeles City Attorney’s Office, and …show more content…

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 …show more content…

Wells Fargo commenced an extensive television advertisement campaign to reestablish confidence and its public image. It intensified its ads in newspapers and established a presence in major sporting events showcasing its signature horse-drawn carriage ad. According to Mark Folk, a Wells Fargo spokesman, “the advertising reiterates Wells Fargo’s commitment to customers and the steps we are taking to move forward and make things right.” Class action lawsuits have erupted across the country from enraged customers; however, these have been quickly struck down due to mandatory arbitration clauses Wells Fargo customers are required to sign as part of new account opening agreements. Wells Fargo has filed motions for courts to defer any class action lawsuits to arbitration since these arbitration agreements are typically binding and are resolved on a case by case

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Wells Fargo Research Paper

754 Words | 4 Pages

Wells Fargo has been in business for over 160 years and was founded on March 18, 1852, by Henry Wells and William Fargo. The company opened its first office, in San Francisco, on July 1852. Wells Fargo served the West with banking needs, which included gold and paper bank drafts, and offered quick delivery of gold or other valuables. In1855, the first of many financial dilemmas took place when a drought made it impossible to mine for gold, and this caused almost 200 businesses in San Francisco to fail, but Wells Fargo didn’t fail, they prospered. In the early1860s, Wells Fargo acquired almost all the stage lines from the Missouri River to California, giving them a monopoly on transcontinental delivery services.

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Buck V. Chevroly Case Summary

749 Words | 3 Pages

A. BWO will likely be able to prove that Chigurh was terminated for a legitimate business reason either because he held a management position or for the financial factors associated with fulfilling the agreement with Wells. An employer may terminate an employee for good cause under the WDEA. § 39-2-904(b). Good cause is defined as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.” § 39-2-903(5).

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1678 Words | 7 Pages

Paying this amount alone would greatly have decreased the profitability of BWO, and coupled with the possibility of having to pay Wells an additional $100,000 for the full market value of his former stock, the only reasonable choice was to reinstate Wells as executive

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What Is The Name Of Initial Board Of Director Of Henry Wells Fargo

337 Words | 2 Pages

It provides financial services to California. The Name of initial board of directors of the Company were Wells, Fargo, Johnston Livingston, Elijah P, Edwin B. Morgan, James McKay, Alpheus Reynolds, Alexander M.C. Smith and Henry D. Rice. The Company faced the first

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187 Words | 1 Pages

It would seem the government did not fail to prosecute the executives responsible for the mortgage fiasco. “The Justice Department has an ethical obligation not to bring cases unless they have a better than 50% chance to convict. They argued the merits of each case and always came up short of the evidence necessary for a successful conviction. Greed is not a crime.” (Henning, 2015) The Assistant attorney general Lanny Breuer was not confident in his ability to prove criminal intent and therefore has not filed charges.

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In Wells Fargo Scandal, The Buck Stopped Well Short Summary

498 Words | 2 Pages

Ms. Tolstedt decided to retire in July, 2016 when the investigation was moving toward finality. Wells Fargo allowed Ms. Tolstedt to retire and take with her around $125 million in stock options while around 5300 of her former employees are getting fired for their part of the fraudulent activities. The author feels Wells Fargo did an injustice to society and Ms. Tolstedt’s former employees by allowing her to retire and take all of her stock options with her, since she should have been

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Pros And Cons Of Sarbanes Oxley Act Of 2002

1249 Words | 5 Pages

As stated by Karen Seymour, Chief of the Criminal Division in Manhattan’s U.S. Attorney’s office in an interview: “I thought it was going to be a really good tool, But it never really developed.” Karen had expectations of seeing CEOs and CFOs being held responsible for fraud. However, over ten years later and only a few defendants have been charged, of that amount even fewer convicted. One of the most notable SOX cases against HealthSouth CEO Richard Scrushy, ended up in an acquittal.

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During The Great Recession Wells Fargo

128 Words | 1 Pages

1) -During the Great Recession Wells Fargo targeted black people and convinced them to take out subprime loans. Such actions lead to the result of Wells Fargo being sued in 2010 for discrimination and a year later settling the suit paying more than 174 million. -The early economy was built on slave labor. Not only did slaves build the Capitol building, but they built the White House too.

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800 Words | 4 Pages

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760 Words | 4 Pages

Lack of trained investigators bias against tipsters, and no communication between offices and investigators led to the failure of the later investigations. In the first investigation of 2005, when the supervising investigator discovered Madoff was not using the Barclays bank, he ignored the information. He did not send it to the investigators (pg. 144), who could have used that information as proof Madoff was lying. The investigators not knowing about the 2003 investigation is another example of the lack of communication between the offices of the SEC. The biggest failure in the investigation in November 2005 was the SEC’s failure to follow up on the document Madoff submitted with the list of DTC accounts.

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263 Words | 2 Pages

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The controversy came about when the president and CEO of the organization who had been in that position since 1970, William Aramony, resigned amid allegations of money laundering among other things. Aramony was under investigation for fraud and mismanagement of funds. The trial that involved Mr. Aramony and the two codefendants lasted until 1995, when Aramony was convicted. He was convicted on charges of 23 of 27 counts of fraud, filing false tax returns, conspiracy, and money laundering. He and two top officials were also convicted of looting $1.2 million to fund an extravagant and lurid lifestyle.

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