After being slammed a sanction worth $3 billion for creating wrong accounts, misusing customers” information, and conducting fraudulent transactions, Wells Fargo fake accounts fiasco has landed the Bank into more trouble than imagined.
However, through its recent $5 million blockchain project Elliptic investment, the Bank is looking to get out of its current predicament and would mark a 180-degree shift from its initial stance on cryptocurrency.
Reportedly, San Francisco’s Wells Fargo bank was implementing policies that pressured their staff to meet unrealistic sales goals between 2002-2016. This prompted the bank staff to begin to operate unprofessionally, falsifying bank records, creating savings, checking accounts in customers’ names without their consent, etc.
These criminal acts being perpetrated by the bankers were being carried out with full knowledge of the top officials as it continued to eat deep into the institution operation, while the management continued to press for their unlikely objectives to be achieved.
In 2004 an in-house investigator described the issue as a rising infection while the following year, another in-house investigator described it as growing out of control.
However, Wells Fargo, on Friday, as announced by the Department of Justice, agreed to pay $3 billion sanctions to settle a civil lawsuit and resolve a criminal prosecution. The bank would, reportedly, also assist in conducting investigations into the fake accounts fiasco. However, current and previous staffs of the bank stand to be prosecuted by the law afterward.
Wells Fargo fake accounts fiasco, beyond the $3 billion fine
In the wake of all the Wells Fargo fake accounts fiasco and the slammed fine on the firm; attorneys have continued to criticize the 4th largest Bank putting it at the mercy of the public.
Deputy Assistant Attorney General Michael Granston said that if the firms continue to swindle to contend in business in a similar manner, they injure clients alongside business contenders. He said the sanction makes the bank answerable for condoning those illicit acts.
U.S. Attorney Andrew Murray mentioned that the sanction is more than the cost of doing business. He furthers that if firms like Wells Fargo get greedy and they lineup their interest before the clients’ then his office will see to it that they pay. He said the fine is a pointer that no firm, no matter the size or influence is beyond being sanctioned.
U.S. Attorney Nick Hanna believes it is a case of failed management at several stages in the bank’s hierarchy that lead to the Wells Fargo fake accounts. She said the bank soiled its reputation for cheap profits harming innocent clients.
Wells Fargo fake accounts fiasco, a shot at decentralized financing
Wells Fargo fake accounts fiasco is not the first in the industry nor it is the first traditional bank to have been sanctioned. Following the 2008 financial crisis, top tier banks have paid over $240 billion sanctions for abusing clients” data. Bank of America paid $ 76 billion in sanction as JP Morgan Chase, Deutsche Bank, Citigroup amidst others have paid heavy penalties too.
Wells Fargo has invested $5 million in blockchain projects before now, which could stem future occurrence of criminal acts its staff and top officials engaged in.
With the manner these banks have handled finances and information of clients in the past while putting their own reputations at risk, fear of centralized banking debacles is beginning to pave the way for alternate decentralized financing.
Featured Image by Pixabay