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I’ve been debating whether or not to comment on Wells Fargo’s latest example that its business model is literally based on lie, cheat and steal. But an email from a friend and top managements denials of any knowledge about it pushed my hand. When something involves 5,300 employees and occurs over a 2-3 year period that sees the fraudulent opening of some 2 million bank and credit card accounts any claim that management didn’t know is either an admission of stunning and out right dangerous incompetence or a bald face lie. Either way it demonstrates yet again that management is categorically unfit, that said the head of the department that oversaw this walked away with a 125 million Dollar bonus. The initial regulatory response is a 185 million Dollar fine or $92.50 for each fraudulently opened account, a figure less than ½ of 1% of last year’s net interest income and including the obligatory waiver of any responsibility or guilt. Based on the previously mentioned household income data this would be equivalent to fining each household $23.22, chicken feed. But honestly you have to wonder how on earth something like this actually happened. Moody’s credit rating service noted that this was a negative event for Wells Fargo adding that it was highly disturbing, management failed to supervise employees and that the practices were pervasive and inappropriate. Comments aside looking at the nuts and bolts and the best “innocent” explanation is that the bank is just plain too big to manage effectively. The more likely and reasonable explanation is that that this is simply Wells Fargo’s latest example of malfeasance driven by a lawless corporate culture that has the audacity to throw the rank and file under the bus pretending that management had no idea what was going on. If you believe that give me a call as I have a bridge I would like to sell.

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