Alarm bells, arrogance and the crisis at Wells Fargo
Fake accounts. Executives who only wanted to hear good news. Tens of billions of dollars in damage. As the bank’s chief security officer, Michael Bacon spent years raising concerns about rampant sales abuses. In exclusive interviews, he details how the bogus-accounts scandal unfolded — and argues that it could have easily been stopped.
As the phony-accounts scandal is brewing in 2014, the executive who functions as the top cop inside Wells Fargo gets shown the door.
Editor's note
The giant bank's woes, and punishment, began years ago — and still linger today. Revisiting the saga's origins now yields several important lessons.
Corporate-governance and ethics experts offer tips to avoid management wrongdoing at all levels of a bank.
The scandal's roots stretch back more than a decade. In a corporate environment that doesn't welcome bad news, problems fester.
The bank establishes a committee with the express purpose of addressing employee misconduct. But as the problem of unauthorized customer accounts grows, it stops meeting.
An article in the Los Angeles Times provides an opportunity for bank executives to address the underlying problems. Instead comes a focus on damage control.
After the scandal explodes, Wells Fargo's former chief security officer embarks on a long journey into the legal system.
In February 2018, the Federal Reserve prohibited the San Francisco-based bank from growing beyond $1.95 trillion. Five years later, analysts, investors and lawmakers are left with more questions than answers about the unprecedented enforcement action.
A reporter tried for more than two years to speak with Michael Bacon, the megabank's former chief security officer. Bacon eventually sat for around 30 interviews, painting a detailed picture of the Wells executive suite as the fake-accounts scandal unfolded.
Michael Hsu, the interim head of the Office of the Comptroller of the Currency, warns that the OCC and other agencies would take harsh steps to punish large banks that chronically violate the rules — including splitting them up.
The Consumer Financial Protection Bureau's new unit will identify the root causes of recurring violations and find ways to hold companies accountable.
In a sprawling consent order, the Consumer Financial Protection Bureau order cited mismanagement that extended from auto loans to mortgages and deposit accounts. Wells Fargo CEO Charlie Scharf called the agreement a critical milestone to "put these issues behind us."
In this month's roundup of American Banker's favorite stories: Development of central bank digital currencies gains momentum, ongoing lawsuits against JPMorgan Chase and PNC address the banks' liability and more.
The giant bank's woes, and punishment, began years ago — and still linger today. Revisiting the saga's origins now yields several important lessons.
Corporate-governance and ethics experts offer tips to avoid management wrongdoing at all levels of a bank.