Friday, September 9, 2016

Big Bank, Big Criminal

Wells Fargo Fined $185 Million For Fraud:

For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.
On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.

Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.

In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.
Including the author of this blog, who is now busy running credit reports to see how many accounts were fraudulently opened in my name over the past few years. 

While the depth and length of the fraud is both astonishing (five years?) and not (it's Big Banking, who's really surprised?), the lack of criminal culpability is more troubling.

Not only were the 5,300 employees terminated, as opposed to arrested and jailed, but not one single upper level management or senior executive was even disciplined.
Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees. Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.

Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.
LOL. Like these 5,300 people were operating in a vacuum, with no senior executives being aware what over FIVE THOUSAND EMPLOYEES were doing on their behalf.

This is why "settling" these cases in civil court, rather than prosecuting these cretins in criminal court, perverts the rule of law itself. Put it this way, if you stole someone's identity and illegally opened and closed accounts under their name and got caught, you'd end up doing 10-20 years at the cross-bar Hilton, no questions asked. 

These people? Terminated, hands washed, case closed. And worse is how upper management escapes culpability by paying the fine.

Let's pedestrianize it further for a moment: imagine the mob carrying out a variety of shakedowns, loan sharking and money laundering. When people start complaining, the don fires a handful of street guys, claiming he had no idea they were doing such a thing. Not only do the wise guys escape criminal punishment completely, the family then pays a fine to the district attorney to make amends for the "confusion" and trouble, and the case simply goes away.

No, that's not "far-fetched." It's totally analogous to what the dons/senior execs at Wells Fargo got away with here. 

Nice to know, more than 8 years since the financial meltdown started via the greatest ripoff ever perpetrated by Wall Street, that absolutely nothing has changed in the world of big banking. When prison is taken off the table, this stuff will continue ad nauseum in perpetuity.

Meanwhile, I'm applying for my refund and think I'll just withhold next month's mortgage payment. Y'know, till we can "figure out what the hell is going on." Ha ha...

Btw, that picture above? I took it from the Wells Fargo website "annual employee retreat."

UPDATE: As this article points out, the most egregious part of the "settlement" is that the sociopath executives who run Wells Fargo didn't even have to admit wrongdoing.
But with its banking regulators, Wells Fargo was not as contrite. The bank agreed to pay $185 million in fines and hire an independent consultant to review its sales practices, but it was able to settle the investigation into the questionable accounts without officially admitting to any of the suspected misconduct.

It was classic Wall Street. Since the financial crisis, regulators have brought dozens of cases against banks and other financial firms, hitting them with tens of billions of dollars in fines and requiring the companies to overhaul their business practices. But frequently, regulatory cases are settled without a bank having to admit doing anything wrong.
"Classic Wall Street" indeed. Another victory for big bank thugs and the Keystone regulators who enable them.

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