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Wells Fargo CEO John Stumpf Steps Down

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Re: Wells Fargo CEO John Stumpf Steps Down

#191

Post by stickfigure »

disposablezero wrote: post #175
eric_h wrote: post #158

Earlier quoted context omitted.

It makes sense if humans were perfect. When an employee objects to unethical behavior and acts accordingly, it makes less sense.

Exactly. Libertarianism and communism seem like perfect utopias but "If all men were angels, no government would be necessary." Unfortunately, company insiders may see little difference in a "misbehaving" employee, regardless if it's in the public good and/or for personal gain, because limiting the threat of public exposure is often the paramount priority in the short-term, which may ultimately go against long-term b…

This form appears to be required by government. No matter what you think about libertarianism, this isn't it.

Re: Wells Fargo CEO John Stumpf Steps Down

#192

Post by prewett »

hvmonk wrote: post #124

Senator Elizabeth Warren's questioning at the hearing is worth watching: https://www.youtube.com/watch?v=xJhkX74D10M

While I agree with her points, it seemed like she really was preaching rather than investigating (at least for the first five minutes that I watched). Her questions were leading questions of the yes/no variety where she already knew the answer. I think Stumpf needs to be held responsible beyond resigning (canceling his golden parachute would be a good start). But I think Senator Warren should either give a speech or ask honest questions, but not give a speech disguised by a veneer of questioning.

Nothing personal against Senator Warren, I assume this is de rigeur for Senate hearings.

Re: Wells Fargo CEO John Stumpf Steps Down

#193

Post by gjolund »

jhou2 wrote: post #37
jackmott wrote: post #31

Why isn't anyone in jail again? We will choke a guy to death for selling cigarettes incorrectly, and can't put people stealing millions in jail.

Well, apparently in America, it helps to not be black.

The race war is just a distraction from the class war.

Re: Wells Fargo CEO John Stumpf Steps Down

#194

Post by mixmastamyk »

rsync wrote: post #174
mixmastamyk wrote: post #142

My perception is that WF took a big turn for the worse ethics-wise when they merged with Norwest in Minneapolis. Never heard a negative word about them until that time.

nitpick: Norwest actually purchased WF outright, but then adopted their name and branding.

Did it include a "brain transplant?" I thought that was the case but went to look it up and couldn't find any details.

Re: Wells Fargo CEO John Stumpf Steps Down

#195

Post by ptaipale »

ianai wrote: post #190
somedangedname wrote: post #137

Earlier quoted context omitted.

> A control fraud will often obtain "investments that have no readily ascertainable market value", and then shop for appraisers that will assign unrealistically high values and auditing firms that will bless the fraudulent accounting statements. A whole new way to think about startup acquisitions!

Unfortunately, estimating future value is fundamental to the nature of all start ups. Of course it's often going to be wrong. The difference here is Wellsfargo has been around for ever. Their market value should be mature, stable, and reliable by comparison.

Moreover, the business they are in is such that you shouldn't expect to see hockey stick type growth predictions.

Sometimes it happens that a company has been around for a hundred years but then enters a new business and sees phenomenal growth. That is reasonable. For Wells Fargo's operation, no.

Re: Wells Fargo CEO John Stumpf Steps Down

#196

Post by crdoconnor »

lazaroclapp wrote: post #156
will_pseudonym wrote: post #134

Earlier quoted context omitted.

Punishments should always be greater than the financial damages, because otherwise the expected value of fraud will always be positive.

It depends. Do you consider loss of reputation part of the punishment, or just an additional natural consequence of the fraud? If you want to think like an economist about fraud, in terms of pure monetary cost/benefit (which is not how people, even CEOs, think), then the game is something like this: Every year you can get $X by being honest, or $(X+Y) by committing fraud, you have probability p of being caught every…

>If you want to think like an economist about fraud

You don't.

Thinking like an economist about control fraud is the exact mistake Alan Greenspan made when he denied that fraud could exist because an efficient market wouldn't allow it:

http://www.dailykos.com/story/2010/11/7/918589/-

His fatal assumption was also that reputational risk was enough to prevent it from ever happening.

Re: Wells Fargo CEO John Stumpf Steps Down

#197

Post by mendelsd »

jackmott wrote: post #163
agjacobson wrote: post #145

Earlier quoted context omitted.

Why should you care who services your mortgage? The only thing on your mind should be proper treatment of any payments you make exceeding your standard payment. You need to be sure that extra amounts are credited to principal.

Because you are funding evil? Why would you not care? Why is half of the world sociopaths?

> Why is half of the world sociopaths?

That's probably a rhetorical question, but I'll bite. Game theory applied to evolutionary biology provides a compelling qualitative answer to this question. You can read about it in Richard Dawkins' "Selfish Gene".

Basically, if social interaction is regarded as an Iterated Prisoner's Dilemma, with options to cooperate or defect at each turn, one might say that a society cannot prosper if everyone always defects, but also that a society made up exclusively of cooperators provides an advantage to genetic mutations that give rise to defector behavior. Societies will therefore tend to have a some degree of cooperation with some freeloading from defectors, and the balance will fluctuate.

Re: Wells Fargo CEO John Stumpf Steps Down

#198

Post by forgetsusername »

Klinky wrote: post #157
forgetsusername wrote: post #133

Earlier quoted context omitted.

> Wells Fargo put her onto a permanent blacklist that others in the industry pay attention to - she can't get a job anywhere else. I just listened to this episode last night, by chance. She speculates that she is on a blacklist, because she's having trouble finding work. But there's a more charitable (to the other banks) explanaton: she was a very low level employee who, true or not, just got fired for a massive frau…

You must not have listened very closely. As noted below in the transcript, they confirmed the U5 form. Also she started in 2007 and it was noted she worked there for 5 years, i.e. fired around 2012 before shit hit the fan. Her story is actually rather common for honest employees working at Wells Fargo, which is why they are going to get sued by many for wrongful termination. Management mismanaged employees and create…

>they confirmed the U5 form

Not a "blacklist", and not unexpected when you're canned from a finance job. As far as WF is concerned, she committed fraud, so they filed a U5. Would you rather they not? It will be investigated; if it's unfounded she can sue.

>Her story is actually rather common for honest employees working at Wells Fargo

Yes, there are honest employees caught up in this. There are also many dishonest ones.

>If anything, they are the most responsible for creating the shitty culture

Really? More responsible than the people who commit the act? That is ridiculous. Have some personal accountability. If my employer asked me to do some fraudulent, I would refuse. I certainly wouldn't rip people off, then complain that I was "told to".

Re: Wells Fargo CEO John Stumpf Steps Down

#199

Post by shshhdhs »

mendelsd wrote: post #197
jackmott wrote: post #163

Earlier quoted context omitted.

Because you are funding evil? Why would you not care? Why is half of the world sociopaths?

> Why is half of the world sociopaths? That's probably a rhetorical question, but I'll bite. Game theory applied to evolutionary biology provides a compelling qualitative answer to this question. You can read about it in Richard Dawkins' "Selfish Gene". Basically, if social interaction is regarded as an Iterated Prisoner's Dilemma, with options to cooperate or defect at each turn, one might say that a society cannot…

There'a so much speculation in that entire paragraph, I don't think that OP would accept this.

Re: Wells Fargo CEO John Stumpf Steps Down

#200

Post by MaysonL »

a3n wrote: post #59
jhou2 wrote: post #37

Earlier quoted context omitted.

Well, apparently in America, it helps to not be black.

If Stumpf were black we'd be reading the exact same story.

cf. the career of Richard Parsons, CEO of Citigroup: https://en.wikipedia.org/wiki/Richard_Parsons_(businessman)
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