1. Wells Fargo: What It Will Take to Clean Up the Mes

    Wells Fargo: What It Will Take to Clean Up the Mes

    A series of scandals has sparked a crisis of confidence in Wells Fargo, the nation’s third-largest bank whose roots harken back to the Gold Rush era when it provided financial services to miners in the Wild West. The most recent scandals — which included falsifying and accessing without authorization more than 2.1 million deposit and credit card accounts — has led to one of the biggest stains on the bank’s reputation in its 165-year history...

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    1. It is a very serious set of violations that calls into question whether Wells is in fact too big to manage well.
    2. The fine is not the real damage to the company.
    3. This offense is clearly pretty egregious. We have not seen similar things in similarly large banks in the U.S. yet.
    4. Before the crisis, Wells was the most valuable bank in the world.
    5. They were the envy of the banking industry for their ability to cross-sell products to their customers.
    6. It wasn't disclosed for over a year, only after it becomes apparent that lawsuits and The New York Times (which broke the story) will reveal the details.
    7. For non-lawyers among us, this is a frustrating outcome.
    8. If the problem is systemic, then a CEO resignation isn't going to change the culture, especially if the replacement is internal.
    9. The board of directors is making a very conscious decision to try to put better internal controls in place.
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