Financial Analysis: The Wells Fargo Scandal

1156 Words3 Pages
bulb-icon

Recommended: Analysis of wells fargo

Wells Fargo, which be seated at the 4th largest bank in America with $1.75 Trillion in assets at the time, had a great wealth of capital to distribute to its public relation division. A persistent interest in maintaining a good public belief among both customers and stockholders, it could be anticipated that timely and cautious actions would be taken in light of a scandal. Wells Fargo’s response to the scandal was exactly that, quick, orderly and official. However, despite any preparation a company could devise, it is impossible to predict the scope and impact a scandal such as this could enforce more. To better understand what needed to be done to for restoration of their bank’s function and reputation, The Wells Fargo conducted and did research …show more content…

The survey was a quantitative collection of views on the company before and after the disaster happens. The research was carried out through online reviewing 1,000 Wells Fargo primary customers and 500 customers from other Top 10 U.S.Banks. The study covered customer views on the bank’s reputation, trends on customers transferring from the bank, estimated financial loss and how the other banks could take benefit from scandal. This survey would act as a secondary research source for the bank and could have been used to compare with similar surveys conducted from within the company to form a better outlook on their consumer stakeholders.
• Wells Fargo closely researched would be their firm’s stock market valuations during the crisis & comparison with the competitor banks.
• Well-being and value in the eyes of their stockholders. An assessment of Wells Fargo’s stock listing from the time of the crisis onward was conducted in a quantitative review by CNN money. This review was a content analysis of the company’s stock that showed that Wells Fargo, during the crisis, hits a 31-month-low share price. Due to the crisis & share price drop was reflective of the fear from Wall Street stakeholders that the company’s reputation and potential for profit was at stake. From this information Wells Fargo could also see the impact of their movements on the stockholder in

Show More
Related

  • Scott Welch and the Defrauding of Wachovia

    1074 Words  | 3 Pages

    In recent years, it seems as if there is a new financial fraud being reported any given day. One could even say that fraud has become almost a much a surety as taxes. Given the opportunities and pressures, many will businesses will fall victim to human natures and suffer losses through fraudulent activities. This case study will follow one such fraud, following the crimes of Terry Scott Welch in his pursuit for happiness by indulging his passion of landscaping.

    Read More

  • Scandal Wells Fargo Scandal

    980 Words  | 2 Pages

    Wells Fargo account fraud scandal One of the most recent white-collar crimes involved Wells Fargo, a banking and financial services provider. In 2016, San Francisco-based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo is involved in paying $185 million in fines and refunding $5 million to affected customers.

    Read More

  • Wells Fargo Ilunt Fraud Scandal

    1019 Words  | 3 Pages

    As Wells Fargo convicted all the requirements of fraud they are involved to the business crime called fraud, they are liable to their fraud crime. There was a false statement which respectively conducted to the injury to the alleged victim as a result. Wells Fargo has been ordered to pay $185 million in fines, but that's a pittance compared with the $5.6 billion the bank earned in just the second quarter of this year. Meanwhile, the bank's victims weren't just nickel-and-dimed with overdraft and maintenance fees. Many of them took "significant hits" to their credit scores for not staying current on accounts they did not even know about. They will likely have difficulty securing home and car loans at reasonable rates for years to come, simply because their bank decided to defraud

    Read More

  • The Wells Fargo Crisis: The Comptroller Of The Crisis

    1079 Words  | 3 Pages

    One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then

    Read More

  • The Enron Disgrace

    2858 Words  | 6 Pages

    ...FO at the Houston airport. While Mr. Fastow's parents were undergoing a random search, he stopped to chat with Mr. Schwieger. "I never got an opportunity to explain the partnerships to you," he said, according to Mr. Schwieger. Mr. Schwieger replied, "With everything that has come to light, I probably wouldn't like the answer I would have gotten."

    Read More

  • The Financial Scandal Involving David Durenberger

    1200 Words  | 3 Pages

    Corruption is an individual and institutional process where there is a gain by a public official from a briber and in return receives a service. Between the gain and the service, there is an improper connection, (Thompson p.28). The two major categories of bribery is individual and institutional corruption. Receiving personal goods for the pursuit of one’s own benefit is personal fraud. An example of individual distortion is the financial scandal involving David Durenberger. Organizational corruption involves “receiving goods that are useable primarily in the political process and are necessary for doing a job or are essential by-products of doing it,” (Thompson p.30). An instance of institutional fraud is the Keating Five case. There are also times where there is a mixture of both individual and organizational corruption in a scandal. An example of this diverse combination is James C. Wright Jr. actions while he was the Speaker of the House.

    Read More

  • Wells Fargo's Ethical Behavior Of Wells Fargo

    710 Words  | 2 Pages

    Key stakeholders are owners, directors, employees, and the community that the organization draws it resources businessdictionary.com,2016). Out of the 1000 Wells Fargo customers that were surveyed 3% stated that they were personally affected by the scandal and 14% of them stated that they have changed banks while 30% of them were currently looking to switch. Studies predict that Wells Fargo could lose about $99 billion in deposits and $4 billion in revenue because of customers rejecting to do business. Individual customers weren’t the only ones that were affect by the scandal but similarly 10,000 small businesses (Razin, 2016). I believe that the owners will be affected as well because of profit losses that will eventually affect Wells Fargo shares and the employees were affected after 5,300 of were fired (Razin,

    Read More

  • Analysis Of Jpmorgan Chase, Bailouts, And Ethics

    601 Words  | 2 Pages

    Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.

    Read More

  • The Merger Between Wells Fargo and Wachovia Bank

    2033 Words  | 5 Pages

    It is proper to present a business definition of merger as it found on legal reference with the ultimate goal in the pursuing of an explanation on which this paper intents to present. A merger in accordance with the textbook is legally defined as a contractual and statuary process in which the (surviving corporation) acquires all the assets and liabilities of another corporation (the merged corporation). The definition go even farther to involve and clarify about what happen to shares by explaining the following; “the shareholders of the merged corporation either are paid for their share or receive the shares of the surviving corporation”. But in simple terms is my attempt to define as the product or birth of a corporation on which typically extends its operation by combining with another corporation. So from two on existence corporations in the process it gets absorbed into becomes one entity. The legal definition also implied more than meet the eye. The terms contractual and statuary, it implied a process on which contracts and statuary measures emerge as measures to regulate, standardized, governing or simply at times may complicate whole process. These terms provide an explicit umbrella and it becomes as part of the agreement formulating or promoting a case for contracts to be precedent, enforced or regulated in a now or in the future under a court of law under the Contract Business Law Statue of Practice. As for what happens to the shares of the involved corporations no more explanation is needed as the already actions mentioned clearly stated of the expectations of a merge’s share involvement.

    Read More

  • Wall Street Pragmatism vs George Bailey's Self-Sacrifice

    720 Words  | 2 Pages

    Here, the Narrator tries to justify that morality need only stretch so far and “beyond that point” that there is nothing to be done. Whereas that point where “common sense bids the soul be rid of it” does not exist for the authentic George Bailey, the Narrator’s Wall Street ethics are artificial and self-serving. As such, the Narrator’s overtly pragmatic approach to morality on Wall Street counters George Bailey’s self-sacrificing approach Capra conveys in Bedford Falls. Through this pragmatic approach, the Narrator sees charity as an opportunity for protecting himself: “Aside from higher considerations, charity often operates as a vastly wise and prudent principle – a great safeguard to its possessor” (Melville 93). While the Narrator recognizes

    Read More

  • Analysis Of Wells Fargo Scandal

    1308 Words  | 3 Pages

    In this paper I will identify and analyze the Wells Fargo scandal as it pertains to the breakdown of leadership and ethics. I will first identify and analyze the event and discuss the challenges and conflicts the scandal presented. Then I will evaluate the issue by explaining why the issue has interest and concern to stakeholders followed by discussing the challenges presented to individuals and/or organizations around this case. Lastly, I will recommend action steps that should be taken to those involved as well as discuss what I have learned from exploring this topic.

    Read More

  • 2008 Financial Crisis Essay

    1536 Words  | 4 Pages

    The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.

    Read More

  • Wells Fargo Case Study

    965 Words  | 2 Pages

    During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”

    Read More

  • Analysis of the Enron/Arthur Anderson Scandal

    1550 Words  | 4 Pages

    Enron and Arthur Anderson were both giants in their own industry. Enron, a Texas based company in the energy trading business, was expanding rapidly in both domestic and global markets. Arthur Anderson, LLC. (Anderson), based out of Chicago, was well established as one of the big five accounting firms. But the means by which they achieved this status became questionable and eventually contributed to their demise. Enron used what if often referred to as “creative” accounting methods, this resulted in them posting record breaking earnings. Anderson, who earned substantial audit and consultation fees from Enron, failed to comply with the auditing standards required in their line of work. Investigations and reports have resulted in finger pointing and placing blame, but both companies contributed to one of the most notorious accounting scandals in history. There remains much speculation as to what steps could and should have been taken to protect innocent victims and numerous investors from experiencing the enormous loses that resulted from this scandal.

    Read More

  • Accounting Scandals: The ENRON Scandal in 2001

    1233 Words  | 3 Pages

    Accounting fraud refers to fraud that is committed by a company by maintaining false information about the sales and income in the company books, when overstating the company's assets or profits, when a company is actually undergoing a loss. These fraudulent records are then used to seek investment in the company's bond or security issues. By showing these false entries, the company attempts to apply fraudulent loan applications as a final attempt to save the company by obtaining more money from bankruptcy. Accounting frauds is actually done to hide the company’s actual financial issues.

    Read More

More about Financial Analysis: The Wells Fargo Scandal

Open Document