Former Wells Fargo executive slapped with $17.5 billion in fines
The Office of the Comptroller of the Currency, a division of the Treasury Department in the United States, has finally stuck a blow against one of the most reckless financial institutions in the nation, Wells Fargo. This federal department has linked a former chief executive of Wells Fargo with compulsion on the part of leadership to encourage Wells Fargo employees to set up fraudulent accounts that would hold extracted fees from customers.
John Stumpf, the former executive in question, has been slapped with a monumental fine totaling approximately $17.5 million. The extent of the misconduct was so severe, that the OCC also banned Stumpf from the banking industry for the rest of his life. He was not alone—a former head of banking at Wells Fargo, Carrie Tolstedt is also facing a fine of $25 million.
The Office of the Comptroller of Currency has also issued a notice which argues that Wells Fargo has engaged in toxic business practices over the last ten years, compelling employees to exhibit “serious misconduct” in order to meet “intentionally unreasonable sales goals.” The notice went on to say that the corporation operated within an environment of malignant leadership, indicated by “…an atmosphere that perpetuated improper illegal conduct.”
Wells Fargo’s head of corporate investigations testified before the Office of the Comptroller of Currency, informing them that there was hypervigilance on part of leadership with regards to sales quotas, but lethargic oversight with regards to illegal sales practices. It was apparent to the corporate investigator that leadership was indifferent to how employees met sales quotas, as long as those quotas were consistently met. Lower-level employees were made accomplices—single cogs in a large clockwork corporate fraud.
As the saying goes, “the fish stinks from the head,” and the litigative implications of these proceedings have indicated Wells Fargo reeks of poor corporate culture. Regardless of whether or not it is healthy, corporate culture moves in a cycle, with cause-and-effect factors that can often be traced back to leadership. Not only should leadership be an example for the entire corporation, but their interpersonal conduct within the workplace directly effects their employees’ engagement and productivity. Executives who impose unreasonable or unattainable goals on their employees are setting them up for failure, absolving themselves from responsibility when goals are not met. This leads to a toxic, high-pressure work environment where employees don’t just feel unsupported, but also devalued in the eyes of their employer. Employee engagement goes down, and consequently, so does productivity. This frustrates leadership, which then reacts by tightening their grip, beginning the cycle anew. If your corporation experiences persistent problems with leadership misconduct, it’s definitely time for a corporate culture audit. Corporate culture audits are like checkups for your business. Independent investigators come into your business and evaluate all operations—communication, record-keeping, hiring processes, and employee engagement. They identify the cause of these malignant symptoms and provide the corporation with expert recommendations that will ultimately propel their organization forward. If your corporation needs a corporate culture audit, call Lauth Investigations International today at 317-951-1100 to get a free quote, or contact us online at www.lauthinveststg.wpengine.com