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October 10, 2016 5:49 AM Age: 169 days
Ya Wanna Know Why Americans are Angry?Category: AC - Billboard, AC RSS, A/F Commentary & Opinion, CM Commentary & Opinion, CG News, ERM News, Ethics News, ESG Highlights, Larry Checco
Source: Larry Checco
Here’s a good example.
Wells Fargo fires 5,300 employees over the course of five years for doing what they were essentially strong-armed by their superiors into doing—namely “cross-selling” services, or creating accounts that two million of the bank’s customers neither asked for nor needed—and over which time the bank’s CEO’s wealth increased by $200,000,000 as a result of a stock price increase due primarily to this fraudulent activity.
BTW, the majority of those fired earned about $11 or $12 per hour, around $24,000 or less a year.
Recently, this all comes to light, making Wells Fargo look more like a mafia operation than a bank.
Consequently, Congress charbroils the bank’s CEO, John G. Stumpf, in public hearings, during which time the contrite CEO mewls: “I am fully accountable for all unethical sales practices in our retail banking business.”
So to atone for his and his bank’s less than trustworthy behavior, what does Mr. Stumpf recommend to Congress? He recommends that the bank’s board rescind $41 million of unvested stock he had been awarded, as well as forego much of his 2016 salary, including his bonus.
Sounds magnanimous, right?
That still leaves Mr. Stumpf with well over $100,000,000 in personal assets.
Now maybe I just think too small or I’m too caught up in my own middle-class income bracket, but how much is this man going to personally sacrifice versus the 5,300 people he and his cronies fired?
Will he no longer be able to pay his mortgage? Will he or his family miss a meal and need to apply for food stamps? Will he not be able save for his retirement or his kids’ educations or pay for his daughter’s wedding? Will he go bankrupt because of unpaid medical bills?
The answer: NO to all of the above.
Mr. Stumpf’s life will go on pretty much as it has. And should he resign or be fired from Wells Fargo you can bet that one or more of his cronies will recruit him as a highly paid board member for their bank or company. And so it goes.
But this bad bank behavior isn’t exclusive to Wells Fargo. It’s just the latest example in a long string of bankers gone bonkers. Just in the recent past:
Capital One Bank, like Wells Fargo, deceived literally millions of its customers by pressuring or misleading them “into buying credit card products they didn’t understand, didn’t want, or, in some cases, couldn’t use,” according to Richard Cordray, director of the new Consumer Financial Protection Bureau (created as part of Dodd-Frank federal banking reforms after the 2008 financial crisis).
Global banking giant HSBC was found to have been for years a haven for foreign money laundering, drug-trafficking money transfers and potential terrorist financing activities.
In 2012, Britain's banking giant Barclays admitted that -- in the midst of the global financial crisis -- it rigged the London interbank offered rate, or "Libor" which is a very important global benchmark for $500 trillion of worldwide financial products--from leveraged derivatives to home mortgages in the USA.
Prior to the Great Recession Goldman Sachs created and sold millions of dollars worth of sure-to-fail bond holdings to its own customers—then bet against them.
And it goes on ad nauseam—and gets worse.
The same day Mr. Strumpf was being grilled by House members, his bank was being fined another $20 million, on top of the $185 million it had already been fined because of its cross-selling scam, “for breaking rules related to loans to [military] service members between 2006 and 2016, including exceeding a 6 percent interest-rate limit for troops and failing to get a court order before repossessing their vehicles.” according to the Washington Post.
This goes way beyond the pale for me.
In full disclosure, one of my sons is a United States Marine and I certainly don’t want him risking his life so that bozos like this can perceive his service to our country as an opportunity to make a profit to further lard their own bank accounts.
Am I angry? Damn right I am—and so are a lot of other Americans. It’s always the little guy who takes it on the nose. The system isn’t rigged. It’s corrupt!
These bankers don’t need to be fined, or have their bonuses and salaries clawed back. They need to go to jail like every other common criminal—and Congress needs to put some teeth into its legislation to ensure that that happens.
Content © 2016 by Larry Checco - All Rights Reserved
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