It was revealed on Sept. 8 that financial giant Wells Fargo fired over 5,000 employees for covertly creating almost two million fake bank accounts since 2011. Essentially, employees reported that they were pressured to take customer’s information and use it to create multiple accounts. While this practice is immoral—and definitely illegal—employees at fault were simply fired from the company without further consequence. Wells Fargo CEO John Stumpf spoke before the United States Senate and House in a hearing, and the U.S. Labor Department is also investigating the firm. Executives at Wells Fargo, however, are not being punished for their actions as much as they should.
Banks earn profit on account fees, which clients pay on legitimate and open accounts. Victims of the Wells Fargo scandal paid multiple fees from additional accounts they were not even aware they had.
The financial giant could use these extra fees to increase their revenue and sales figures. “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” Consumer Financial Protection Bureau director Richard Cordray said, according to CNN. This practice is highly illegal and has earned the company multiple judicial punishments.
In a hearing led by the House Financial Services Committee and the Senate Banking Committee, both partiers berated the actions of Wells Fargo and the lack of moral response from Stumpf. Politicians emphasized how, though low-level employees had been fired, it appeared that none of the executives faced appropriate retribution.
While the company has agreed to pay $185 million in fines as well as $5 million in refunds to clients, these numbers do not even trip up the Wall Street giant.
The Board of Executives at Wells Fargo announced that Stumpf faces a $41 million claw back on his stock earnings—but Stumpf will also receive $200 million in stocks and bonuses related to Wells Fargo. Stumpf has not even resigned from his position and has denied multiple times that the scandal was planned from the top down. He claimed the scandal was the actions of rogue employees.
This supposed unawareness sparked incredible bipartisanship. Massachusetts Sen. Elizabeth Warren commented, “You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket.”
Perhaps we should congratulate the white-collar criminal executives at Wells Fargo for uniting a divided Congress and eliciting similar responses from both campaigns. As interesting as that may be, however, it does not warrant the illegal actions.
This situation exemplifies the growing distrust in Wall Street and the condemnation of the wealthy exploiting the misfortunes of customers and employees.