Very true, which is why I was glad she asked whether anyone in charge of compliance had been fired. However, her point about his paying back the money is pertinent, as he has stated repeatedly that he "takes full responsibility." I don't feel one can claim to both take full responsibility and personally suffer none of the consequences.

While cross-selling is absolutely legal, managers at a high level should be savvy enough about how people behave to realize that if low-level employees are heavily incentivized to sell, while also being punished for not selling enough, then they're going to get creative about how they do it. That should absolutely lead to careful monitoring of any newly-opened accounts to ensure they're entirely legitimate. Without that compliance structure in place, it's inevitable that fraud is going to happen. Human nature makes it very easy to predict.

This is without even getting into the allegations that whistle-blowers who made serious efforts to inform upper-level management about the malfeasance were disregarded and subsequently fired.

Awesome comment. I wish I could upvote it twice. I threw up a little in my mouth watching the grandstanding going on here and how apparently most Sifters are eating it up.

Fraud? Cross-selling is perfectly legal and in fact practiced regularly in many industries besides banking (like when Best Buy tries to get you to purchase a protection plan for any electronics you buy at their store). If she has an issue with it, as a legislator she is free to bring a bill to the floor to do something about it. The problem is, she didn't give a shit about cross-selling until she realized she was going to have an opportunity to stump for future votes in these hearings and she apparently doesn't give a shit about it now because despite those strong-worded pleas for action she's done nothing personally to make anything she said happen.

Stumpf should give up his money? He isn't the one who opened fake Wells Fargo accounts nor is there any evidence he directed his employees to do so. And as he tried to explain before she cut him off to grandstand some more, those fake accounts only represent 1% of the total cross-selling that happened, which means the stock price was not unduly inflated--people were in fact opening of their own volition more accounts with Wells Fargo than any other bank and Wall Street loved them for it.

The real issue here is that there were not adequate controls in place to prevent the fake accounts from being created in the first place (or detected quickly after being created). And for that Stumpf probably does have some small amount of responsibility, although it sounds to me more like whoever was in charge of compliance is the person who likely should be the one left holding the bag.

But let's not let reality get in the way of a politician's dreams of future offices.

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