Wells Fargo

Songar Ideus

Professor Edward Meda

OBHR, 3310, 004, Organizational Behavior

11/17/16
 Table of Contents
Cover Page ...........................................................................................................................1
Table of Contents .................................................................................................................2
Introduction ..........................................................................................................................3

Whistleblowing ............................................................................................................3

Action Plan...................................................................................................................3

Oversight ......................................................................................................................4
Executive Summary .............................................................................................................4
Reference Page.....................................................................................................................5
 Wells Fargo CEO John Stumpf must be relieved of all duties and be terminated
effectively immediately. As the figurehead and Chief Executive Officer of our esteemed
corporation, John Stumpf must follow the following three edicts. He must represent the best of
us, he must lead our corporation to success, and he must adhere to our corporation’s vision,
ethics, and culture. John Stumpf has made a debauchery of our honorable institution by violating
the Sarbanes Oxley Act and allowing whistleblowers to be systematically fired. John Stumpf
failed to cease the company’s fraudulent activities despite receiving information about it and thus
endorsed it. Finally, to prevent future abuse and fraud I support potentially and voluntarily
enacting some internal controls. Overall, John Stumpf done a very poor job of promoting
sustainable growth, corporate ethics, and protecting stakeholders and must be terminated because
of it.

John Stumpf must be relieved of all duties as he allowed the culture of terminating
whistleblowers. According to the Sarbanes Oxley act, publicly traded companies must create an
internal audit committee, which then receives whistleblowing complaints as well as protect the
confidentiality of the whistleblowers (Smith, Y). Furthermore, section 3b of the Sarbanes Oxley
act states that any person in violation of this act will be treated as if they are violating the
Securities Exchange Act of 1934 (Smith, Y). Additionally, there are protections for
whistleblowers going to the government (Smith, Y). In 2010, two employees went to the federal
government and reported our fraud to the Department of Labor’s Whistleblower Protection
Program. Fortunately for us however the cases were never investigated (Villarreal, L. W). That
gave us six years to which we had to fix the problem. However, despite the whistleblowing
through people like Yesenia Guitron, who reported fraud to us in 2008 until she was fired for it
(Former Wells). Then following that, she held a public lawsuit which the Judge then dismissed
her claims and sided with our bank (Former Wells). Beginning then, John Stumpf should have
known there was an issue and that gave us eight years to fix the problem. Unfortunately, John
Stumpf has either made a mockery of this establishment by ignoring the problems and failing to
recognize them, or purposefully disregarding them for the sake of profit. Overall, I believe it is in
our best interest to compensate, rehire and promote, and thank the whistleblowers as part of an
ad campaign to boost our legitimacy and image. Through a successful ad campaign, we could
turn our image around from fraud to friend and give investors and American’s alike comfort
knowing that we are a changed company.

Information regarding fraudulent activities officially reached John Stumpf’s desk in 2013
and he was aware of the problem (Puzzanghera, J.). What actions that he should have done was
first by notifying the investors that there was fraud detected in the system. This never occurred.
And as our duty is to our stockholders, it’s crucial for us to keep them well notified on the goings
of our company to allow them to make educated decisions on investing in us (McGrath, M).
Secondly, he should have looked into reports of whistleblowing and how it was being handled.
Under the Racketeer Influenced and Corruption Act, John Stumpf can be personally held
responsible and prosecuted for ordering crimes but not personally carrying them out (Darmiento,
L). This is possible because our bank committed fraud and either intimidated or fired
whistleblowers (Darmiento, L). As head with knowledge of these activities, he’s an accessory to
the fact at a minimum. But despite even holding a personal stake and having multiple federally
mandated protections that he has to abide by on him for whistleblowers, John Stumpf did not
look into the situation regarding whistleblowers. Thirdly, he should have started an independent
investigation into our own corporation to root out exactly just what the scope and depth of the
fraud was. Even if it’s true that John Stumpf only knew in late 2013 about the fraud, he could
have ceased it then with a private internal investigation (Puzzanghera, J.). Three years ago we
could have been on top of this issue rather than behind. If we had taken care of this years ago, the
damages could have been mitigated and our public image unmarred as we would have been the
ones to discover the issue and resolve it in an ethical and public manner. Finally, he should have
fired those that were responsible. While 5300 employees have been fired, this occurred over
several years and this represents just one percent of our employees (That's exactly). Furthermore,
this does not include the administrators actually made the push to commit fraud to gain profits
(That's exactly). This just includes those that were forced into fraudulent activity under the threat
of termination should they either become whistleblower or fail to reach Stumpf’s impossible
mantra of “eight is great.” (Regan, M. P) Meaning that each household should have eight
products signed up to them. Additionally, by allowing the same administrator’s to remain in their
current positions, John Stumpf is only promoting the old culture. New employees are needed to
bring about Wells Fargo culture back. I believe it is our moral duty and in the best interest of our
public image to fire those administrators that were truly responsible for this crisis, one of which
is John Stumpf.

With Wells Fargo currently being too big to fail, we are in a fortunate position to make it
through this crisis. Unfortunately, this has also brought the attention of Americans and several
prominent anti-Wall-Street, anti-too-big-to-fail democrats like Elizabeth Warren (McGrath, M). I
believe we can weather the storm without seeing legislation that targets Wells Fargo or
implements further restrictions and oversight like Glass-Steagall. However, because of Wells
Fargo, the government is just one step closer to implementing such reforms. So while we may
not see such consequences today, we very likely will see such consequences later on. I believe
that we do not need any such oversight as we can efficiently and quickly clamp down on any
misconduct that we find with an ethical CEO in charge. The entire fraud mishap was directly due
to John Stumpf’s spurring on for profits and his blind eye approach to fraud. With a Chief
Executive Officer that is ethical, in line with company ideals, and pushes sustainable growth, we
can see a recovery and resurgence of Wells Fargo despite this setback. However, with that said,
creating further safeguards and processes within our own company to ensure this never happens
again would be an excellent idea. This would give us ground with federal prosecutors and other
hostile democrats by giving us legitimacy. Furthermore, if additional reform was passed through
the government requiring additional external or internal oversight, we may very well be done
already. And if this entire debacle taught our bank anything, it’s that we must be ahead of the
curve, not behind it.

Wells Fargo CEO John Stumpf must be relieved of all duties and be terminated
effectively immediately. This is due to the fact that he allowed the culture of terminating
whistleblowers and that he had the necessary information regarding fraudulent activities he
which received 2013 and that he was aware of the problem. Despite all this, he failed to make the
necessary changes to address the fraud and to ensure our whistleblowers and customers were
being protected. Fortuitously, Wells Fargo is currently too big to fail and this leaves us in a
fortunate position to make it through this crisis. Overall, while Wells Fargo has failed under John
Stumpf’s leadership, we have the opportunity to change and recover.
Darmiento, L. (n.d.). Could Wells Fargo be prosecuted under a law built to fight mafia chiefs?
Retrieved November 18, 2016, from http://www.latimes.com/business/la-wells-fargo-live-
updates-stumpf-ceo-could-wells-fargo-be-proscecuted-for-1475167015-htmlstory.html

Former Wells Fargo employee says she flagged fraud years earlier than CEO acknowledges.
(n.d.). Retrieved November 18, 2016, from http://www.cbsnews.com/news/wells-fargo-accounts-
fraud-california-whistleblower-yesenia-guitron/
McGrath, M. (2016, September 23). How The Wells Fargo Phony Account Scandal Sunk John
Stumpf. Retrieved November/December, 2016, from
http://www.forbes.com/sites/maggiemcgrath/2016/09/23/the-9-most-important-things-you-need-
to-know-about-the-well-fargo-fiasco/#15b9026b7dcb
Puzzanghera, J. (n.d.). Retrieved November 18, 2016, from http://www.latimes.com/business/la-
fi-wells-fargo-live-when-did-wells-fargo-s-ceo-know-about-1474385754-htmlstory.htm
Regan, M. P. (2016, September 20). Eight Rhymes With Separate for Wells Fargo. Retrieved
September 17, 2016, from https://www.bloomberg.com/gadfly/articles/2016-09-20/eight-
rhymes-with-separate-for-critics-of-wells-fargo
Smith, Y. (2016, September 22). Wells Fargo Fake Accounts Hidden by Fake Whistleblowing:
Former Employees, Including HR Officials, Allege Systematic Retaliation. Retrieved September
17, 2016, from http://www.nakedcapitalism.com/2016/09/wells-fargo-fake-accounts-hidden-by-
fake-whistleblowing-former-employees-including-hr-officials-allege-systematic-retaliation.html
That's exactly what happened to Wells Fargo customers nationwide. (n.d.). 5,300 Wells Fargo
employees fired over 2 million phony accounts. Retrieved November 18, 2016, from
http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-
fees/index.html
Villarreal, L. W. (n.d.). Former Federal Investigator Says Government Didn't Investigate Wells
Fargo Whistleblower Cases. Retrieved November 18, 2016, from
http://www.nbcbayarea.com/news/local/Former-Federal-Investigator-Says-Government-Didnt-
Investigate-Wells-Fargo-Whistleblower-Cases-397518261.html
Wells Fargo. (2016). Retrieved November 18, 2016, from
https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/Wells-
Fargo-code-of-conduct.aspx