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How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

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Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#71

Post by apeace »

adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

Most libertarians agree that fraud should be illegal, and that customers should be able to press criminal and civil charges if fraud is perpetrated against them.

In this case, the bank charged customers for services they never requested. That is fraud. It has nothing to do with "free markets" as defined by libertarians.

If you find some libertarian scholarship, you will also notice that libertarians see contract enforcement as a vital role of government. This would also be a breach of contract.

Libertarian != Anarchist :)

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#72

Post by pktgen »

Meekro wrote: post #64
adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

I can't speak for all libertarians, but I consider myself a libertarian and I can make some observations about this whole situation.. 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. If you don't trust the class action to provide…

> 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it.

Nope, since they have a mandatory binding arbitration clause. See http://www.nytimes.com/2016/11/24/business/wells-fargo-asks-....

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#73

Post by anigbrowl »

yummyfajitas wrote: post #42
dangerlibrary wrote: post #24

Earlier quoted context omitted.

Given the enormous scale of the fraud, someone should definitely be going to prison. "But my criminal organization is very large and not everything we did was illegal" is not an excuse.

Enormous scale? The total fees from this fraud were $2.4 million. https://www.bloomberg.com/view/articles/2016-09-09/wells-far... The "excuse" is that a bunch of employees did it against management's express instructions, and that management actually took action (albeit stupid ineffective action) to prevent it back in 2014. https://www.bloomberg.com/view/articles/2016-09-19/tough-tar... This is not something that was…

I should have known you'd show up with some bullshit misdirection.

The scale of the fraud is enormous because it involved millions of accounts. That means millions of individual decisions to misuse customers' accounts for personal profit. The fact that it generated very little income for WF just means that it wasn't a very successful fraud. You don't get to evade criminal liability by saying that your criminal enterprise worked poorly and failed to run an impressive profit.

management actually took action (albeit stupid ineffective action)

Having instituted the policy to begin with, and with the knowledge of how such policies incentivize people, the management bears responsibility for not only the original problem but the ineffectiveness of the subsequent response. The CEO and his peers aren't some clueless kids that got into the C-suite and pushed random buttons on some big control panel, they're experienced managers with a deep knowledge of economics and institutional dynamics...in fact I'm probably selling them short, I'm sure their resumes tell a much more impressive story about their capabilities. So since they were good enough to hire into senior positions, they are surely good enough to take on the responsibility for the highly predictable outcome of their decisions.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#74

Post by gizmo »

yummyfajitas wrote: post #42
dangerlibrary wrote: post #24

Earlier quoted context omitted.

Given the enormous scale of the fraud, someone should definitely be going to prison. "But my criminal organization is very large and not everything we did was illegal" is not an excuse.

Enormous scale? The total fees from this fraud were $2.4 million. https://www.bloomberg.com/view/articles/2016-09-09/wells-far... The "excuse" is that a bunch of employees did it against management's express instructions, and that management actually took action (albeit stupid ineffective action) to prevent it back in 2014. https://www.bloomberg.com/view/articles/2016-09-19/tough-tar... This is not something that was…

The employees' goal posts got moved repeatedly, to the point where employees started cheating out of desperation.

The CEO is culpable because of his "eight is great" mantra. The average citizen does not need multiple checking accounts and multiple credit cards. The entirely goal of the "eight is great" program was to use high pressure sale tactics to push services onto customers that they didn't need.

> At the end of last year, the average Wells Fargo retail customer had 6.3 products, according to the company. [1]

For retail customers this number is absurd. The CEO was fully aware of this. There were whistle-blowers, of course. They got fired.

This was a failure of corporate governance, a failure of internal checks and balances, and a complete moral failure of the chief executive.

So yes the CEO should be held accountable, and that should include jail time.

[1] http://www.wsj.com/articles/how-wells-fargos-high-pressure-s...

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#75

Post by anigbrowl »

prions wrote: post #3

Can we remove: -"Why x matters" -"What we know" -"Slammed" and -"Number x will shock you!" from all news headlines?

I wish. Newspapers seem to have decided that the best way to attract readers is to imitate the magazines that live near the supermarket checkout.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#76

Post by conanbatt »

enraged_camel wrote: post #40
bsder wrote: post #26

Earlier quoted context omitted.

> But the idea that he should go to prison for something like this is ludicrous. Fine. Then the company should get the "death penalty" and be liquidated. Especially for something like the banking sector where the federal government could replace a bank almost instantaneously, the "death penalty" should get dropped on companies that engage in malfeasance.

>>Fine. Then the company should get the "death penalty" and be liquidated. Exactly. After all, corporations are people right? So let's actually treat them like we treat people.

You kill people that rob other people? Where are you from?

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#77

Post by justin66 »

Meekro wrote: post #64
adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

I can't speak for all libertarians, but I consider myself a libertarian and I can make some observations about this whole situation.. 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. If you don't trust the class action to provide…

> If you don't trust the class action to provide you with an equitable settlement, you can opt out and sue them individually. No doubt many lawyers are already lining up for the easy money here.

You either aren't familiar with what the colloquialism "easy money" means or you are really underestimating the difficultly of going to court against a bank.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#78

Post by dangerlibrary »

yummyfajitas wrote: post #42
dangerlibrary wrote: post #24

Earlier quoted context omitted.

Given the enormous scale of the fraud, someone should definitely be going to prison. "But my criminal organization is very large and not everything we did was illegal" is not an excuse.

Enormous scale? The total fees from this fraud were $2.4 million. https://www.bloomberg.com/view/articles/2016-09-09/wells-far... The "excuse" is that a bunch of employees did it against management's express instructions, and that management actually took action (albeit stupid ineffective action) to prevent it back in 2014. https://www.bloomberg.com/view/articles/2016-09-19/tough-tar... This is not something that was…

From your own article: 5,300 employees were apparently engaged in fraudulent activities under his watch.

Profitable or not, I stand by my statement.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#79

Post by anigbrowl »

zodiac wrote: post #49

I watched Stumpf testify in front of the Senate Banking Committee, and while I agree that (from what I saw) he should be held accountable, what I don't understand is why the right venue for it is the Senate instead of the Judiciary. Warren clearly thinks that Stumpf wasn't just doing a bad job, but that what he did and didn't do was criminal in some way (eg the talk of jail time, comparisons to Enron in the article).…

It's fair in that the Senate can't impose any penalty on him other than a public shaming. I agree that it would be better if the judiciary took on this case. Unfortunately Congress holds the power of the purse and that effectively means it can keep the DoJ on a much shorter leash than most people appreciate. Also, sadly, the complexity of litigation means that if it goes to court Wells Fargo could just keep the proceedings spinning out for years before it ever gets to trial, by which point almost everyone will have forgotten what the original issue was. Indeed, this is more or less what happens now.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#80

Post by criddell »

forgetsusername wrote: post #19
tswartz wrote: post #9

I appreciate that Warren didn't let Stumpf talk his way out of taking any responsibility for the actions of his employees and made a clear argument as to why he should be held accountable. Unfortunately, it seems the primary reason he resigned was because the public outrage was loud enough. It seems that until CEOs are personally held accountable via fines or prison (as Warren suggests) we won't see a very big change…

Anyone who has worked in a company of any size knows it'd be down near impossible to know the inner working at all levels of the organization. So, yes, the guy is accountable and needs to lose his job. But the idea that he should go to prison for something like this is ludicrous.

What about a massive fine? Enough to recover all of his bonuses and a good chunk of his salary during his time as CEO?
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