This is the title of my newest law review article[2], which discusses what happened at Wells Fargo Bank to destroy its storied reputation. Sixteen categories of wrongdoing are described, involving legal settlements by Wells in the amount of more than $7 billion. One example is worth noting:
Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, or debit cards were issued without the customers’ knowledge or consent.[3]
It is clear today Wells ran amok and engaged in massive misconduct and criminality. One single example might be enough to raise “red flags” about the culture of corruption and criminality at Wells, but the pattern of misconduct is compelling and overwhelming. Indeed, the scope and depths of the wrongdoing have been incomprehensible.
The cost of the Wells’ debacle to its shareholders, account holders and other customers, to the integrity of the U.S. and global banking systems, and to the American public at large has been staggering. Trust has been destroyed. Wells has been described aptly as “a rudderless ship lost at sea,” and a name change has been suggested.
Wells’ symbol, the stagecoach, was known and respected worldwide as synonymous with safety and soundness, security and stability. Indeed, these critical elements undergird America’s banking system, which is the envy of the world. Yet, Wells was permitted to become, and did in fact become, an unmitigated disaster—and a rogue and lawless financial institution, the largest in the United States if not the world. This is its legacy, which must not be tolerated ever again
In the American “court of public opinion” and globally, Wells may be tried over and over again—as the classic example of bank misconduct and criminality. This constitutes a stinging indictment of the criminality that its former CEO Richard Kovacevich unleashed at Wells. In a very real sense, it is the largest de facto bank failure in U.S. history—where the financial institution itself still exists.
Will its new CEO, Charles W. Scharf, be able to turn things around and right the "sinking ship," or will he become a victim of the culture at Wells? Time will tell.[4]
© 2019, Timothy D. Naegele
[1] Timothy D. Naegele was counsel to the United States Senate's Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and https://naegeleblog.files.wordpress.com/2019/09/timothy-d.-naegele-resume-19-9-27.pdf). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who's Who in America, Who's Who in American Law, and Who's Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com
[2] See Timothy D. Naegele, Well Fargo—An American Banking Nightmare, 136 BANKING L. J. 493 (October 2019) (Naegele October 2019) (https://naegeleblog.files.wordpress.com/2019/09/timothy-d.-naegele.pdf) [NOTE: To download The Banking Law Journal article, please click on the link to the left of this note]
[3] See id. at 526; see also id. at 510, 512, 527.
[4] See https://www.businesswire.com/news/home/20190927005168/en/Wells-Fargo-Names-Charles-W.-Scharf-Chief ("Wells Fargo Names Charles W. Scharf Chief Executive Officer and President")
