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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

#141

Post by raesene6 »

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…

To me the line of argument that this was employee fraud, with an unaware management doesn't fly.

All banks have large internal audit departments precisely for the purpose of catching internal fraud. This is a long standing thing in banking and well established.

The idea that Wells Fargo's internal audit department missed several thousand employees carrying out the same kind of fraud over a period of years is entirely unbelievable.

So either the Internal audit team were in on it (extremely unlikely), internal audit were directed by management not to investigate this, or management ignored the reports for internal audit.

To me, its extremely likely that the later options there are more likely to be what happened.

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

#142

Post by raesene6 »

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…

As to 2.

Either the CEO did know, or he should have known. The bank's internal audit teams must have known (they would have reviewed staff activities as they always do for fraud, and the idea that they had missed this for many years isn't tenable)

So either the internal audit teams were instructed not to report these issues, or senior management ignored their reports.

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

#143

Post by JoeAltmaier »

raesene6 wrote: post #141
yummyfajitas wrote: post #42

Earlier quoted context omitted.

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…

To me the line of argument that this was employee fraud, with an unaware management doesn't fly. All banks have large internal audit departments precisely for the purpose of catching internal fraud. This is a long standing thing in banking and well established. The idea that Wells Fargo's internal audit department missed several thousand employees carrying out the same kind of fraud over a period of years is entirely…

The fact that it was discovered by an external source, not an internal audit, says it all. How can an external auditor have more information than management? Inconceivable.

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

#144

Post by adekok »

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…

> 2. So far, no one has produced evidence that the CEO knew about this or allowed it to happen.

http://www.businessinsider.com/steve-jobs-on-the-difference-...

"Somewhere between the janitor and the CEO, reasons stop mattering," says Jobs

It's one thing to have one or two departments with illegal incentives. When the entire company is run using illegal incentives, the CEO has to know. Or, he should have known.

Quite frankly, the entire executive should be fired for cause, and sued by everyone.

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

#145

Post by tunap »

JoeAltmaier wrote: post #143
raesene6 wrote: post #141

Earlier quoted context omitted.

To me the line of argument that this was employee fraud, with an unaware management doesn't fly. All banks have large internal audit departments precisely for the purpose of catching internal fraud. This is a long standing thing in banking and well established. The idea that Wells Fargo's internal audit department missed several thousand employees carrying out the same kind of fraud over a period of years is entirely…

The fact that it was discovered by an external source, not an internal audit, says it all. How can an external auditor have more information than management? Inconceivable.

And the internal audits of the other major banks have yet to uncover wrongdoing. And yet, up to a year ago I couldn't walk into any bank without getting the desperate, hard sell for services. Where's the BofA and Chase inquiries?

I do miss the pretty lady tellers asking if there was anything else they could do to satisfy me. Not so much the guys.

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

#146

Post by eli_gottlieb »

conanbatt wrote: post #76
enraged_camel wrote: post #40

Earlier quoted context omitted.

>>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?

The fiduciary value of a human life is about one million dollars. Robbing customers or society collectively of, say, 500 million dollars is thus equivalent to massacring 500 people. Yes, business corporations which commit that level of crime should be dissolved.

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

#147

Post by bandrami »

rconti wrote: post #23
forgetsusername wrote: post #19

Earlier quoted context omitted.

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.

Prison may be a bit harsh. And in a vacuum, you're right. It would be somewhat unfair to drop the hammer, out of nowhere, on some unsuspecting CEO who just did "business as usual". But that's no excuse; it just means we need to create a culture where this kind of thing becomes increasingly unacceptable, so that in the future executives will know what's expecting of them, and what the consequences can be. The "uninten…

It would be somewhat unfair to drop the hammer, out of nowhere, on some unsuspecting CEO who just did "business as usual".

I remember learning pretty early on that life is not fair, and later on that the justice system is not fair. But dropping the hammer is the only way that the business as usual stops being usual.

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

#148

Post by venantius »

conanbatt wrote: post #82
venantius wrote: post #53

Earlier quoted context omitted.

Of course, basically all economic theory is predicated on the assumption that information is basically free and widely available. In reality, this is simply not the case - information is either not free, or it is time-consuming to acquire (and therefore not free in another sense). As soon as one understands this a lot of free market ideology stops making sense and things like Consumer Production Bureaus start to soun…

Economic theory is not predicated on such a thing. Information asymmetry is a modeled and studied effect in economics. The efficient market hypothesis is a model that lets you explain certain phenomena that happen even if information is perfect, and though real life is not perfect, it has resemblances to such scenarios.

Perhaps a more narrow description would be for me to have said most free-market economic theory and/or Chicago-school theory, which is what I studied. Other schools of economic thought do a better job of explicitly taking into account the assumption that information is costly.

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

#149

Post by apeace »

jessaustin wrote: post #106
apeace wrote: post #71

Earlier quoted context omitted.

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 enfo…

Libertarian != Anarchist This "faith in the law" is libertarianism's biggest weakness, and the reason why the older I've gotten, the more appealing anarchism has become. The ways we see the law working in this case, are just the ways that law actually works. Screw the little guy and protect the big man? A feature, not a bug! The reasonable way to oppose unfairness is to actually oppose unfairness, not to imagine that…

Agreed, and I appreciate the comment. I've developed the same appreciation for anarchism.

But the original comment I responded to seemed to imply that the libertarian theory would allow this "free market" behavior, which is not the way libertarians see it.

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

#150

Post by user837387 »

stanfordkid wrote: post #100
user837387 wrote: post #92

Earlier quoted context omitted.

I'm sure you've heard that ignorance of the law is no excuse right? Similar principle works here. No way the CEO did not know what was going on if 1000's of his subordinates were doing it. Saying that he couldn't have known is negligent. Personally I do not buy the story that he did not know. Come on for fucks sake, Trump just got elected on virtually pure lies and you are still being stupidly naive. This CEO knew.

He is not going to jail because they did nothing illegal, and most likely didn't even have negative intent. You are speaking like someone who has little experience with sales culture or sales incentive structures. You also seem to be naive to the level of fraud, theft and lies that "working-class" people regularly commit. Get out of the kumbaya bubble and wake up to reality. Workers do bad things all the time. They f…

Yeah, people like you are the problem. Just because you are used to it and/or every body does it does not make it OK. All you are doing is continuing to make excuses for the current fucked up system.
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