Wells Fargo & Company Scandal | Case Study

Running head: BUSINESS
BUSINESS
Name of the Student
Name of the University
Author Note

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BUSINESS
Executive Summary
Wells Fargo & Company is an American financial service provider which is headquartered in
San Francisco, California. It comprises of various offices throughout the United States. It is
declared as the world's fourth-largest bank considering the market capitalization and it is also
ranked the fourth in the US considering its total banking assets. In the year 2016, the
regulatory bodies in the USA suspected that the bank was involved in fraudulent activity by
creating thousands of fraud savings and checking accounts in the name of its clients without
their prior consent. The aim of this study is to find out factors that have influenced the
scandal and also to propose reformative measures that should have been adopted by the new
CEO of the bank to mitigate future financial risk.

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BUSINESS
Table of Content
s
Introduction................................................................................................................................3
Analysis......................................................................................................................................3
History:.......................................................................................................................................3
Financial crisis faced by the bank..............................................................................................3
Role of key players in the crisis.................................................................................................3
After crisis structural change of the bank:.................................................................................3
Factors to be taken into consideration for future risk:...............................................................3
Conclusion:................................................................................................................................3

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BUSINESS
Introduction:
Wells Fargo & Company is an American financial service provider which is
headquartered in San Francisco, California. It comprises of various offices throughout the
United States. It is declared as the world's fourth-largest bank considering the market
capitalization and it is also ranked the fourth in the US considering its total banking assets. In
the year 2016, the regulatory bodies in the USA suspected that the bank was involved in
fraudulent activity by creating thousands of fraud savings and checking accounts in the name
of their prior consent of their existing clients. The clients of the Wells Fargo bank started
spotting the incidents of fraud after they have been charged with unpredicted fees and started
receiving surprising credit cards, debit cards and other beneficial cards by the bank.
Preliminary reports held the lower-level employees of the bank liable for the fraud. This also
includes the managers, sales incentives who were associated with transaction and selling of
multiple solutions or financial products provided by the bank. Later, the onus moved to the
higher management of the bank, who had influenced the lower-level employees in opening as
many as feasible accounts through the policy of cross-selling. The bank's glorious name was
smashed by the extensive fraud practice, and also with the disclosure of other various
deceitful practices by the bank since its incorporation. This controversy further resulted in the
resignation of then CEO John Stumpf. This was further ordered after an investigation had
been conducted against the fraudulent practice of the bank which was led by the Senator of
Senate Banking Committee, Elizabeth Warren. There was various settlement has been made
between Wells Fargo and other parties regarding this fraud, and promises have been made to
reform the existing banking structure of the bank. Numerous amounts of fines have been
imposed on the bank by the different regulatory bodies of the USA like the Department of
Justice, Security and Exchange Commission and Consumer Protection Financial Board. The