Managerial Finance Final Essay.docx - Page 1 Financial...

This preview shows page 1 - 4 out of 17 pages.

Page 1 Financial Regulation Failures: Wells Fargo Scandal Metropolitan College of New York MBA-735-SKI/LECT/MEV2-SPRING17 Dr. Showkat Ali 04/05/2017 Troy K. Oliver; Jamel Hicks, Asif Ali & Calesha John
Image of page 1

Subscribe to view the full document.

Page 2 Table of Content Page 1. Title page 1 2. Table of contents 2 3. Introduction and the nature of the problem in terms of managerial economics 3 4. Mission Statement 4 5. Summary of the existing problem 4 6. Raise the question in the case that you are intended to solve 5 7. State your assumptions based on economics and management theory 8 8. Analyze the existing situation theoretically, mathematically, statistically and graphically a. Constructive criticism is essential b. Explain the probable solutions, suggestions in this case 10 9. Summarize your learning experience and it’s applications in that project 13 10. Conclusion 14 11. Appendices/ Sources and citations 16
Image of page 2
Page 3 Introduction and the nature of the problem On Thursday September 08, 2016 federal regulator reported that Wells Fargo employees had secretly created millions of unauthorized bank and credit card accounts, without their customers knowing it since 2011. The reasoning behind these fraudulent accounts was to create unwarranted fees which then will allow Wells Fargo employees to boost their sales figures and make more money. There was an agenda for all employees in sales at Wells Fargo to meet, in order to receive bonuses and promotions. So Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive these bonuses. The questions remains”how did these employees create these fraudulent accounts? There have been several reports in major news broadcasts that Wells Fargo’s employees accomplished this by creating phony pin numbers and fake emails address to enroll customers in online banking services. The Consumer Financial Protection Bureau (CFPB) stated that over 1.5 million deposit accounts may have been created without prior authorization. Regulators reported that these employees moved funds from customers' existing accounts into newly created ones without their knowledge or consent. Such action lead to customers being charged for insufficient funds or overdraft fees, since unknowingly to them their original accounts did not have sufficient monies to cover costs that they did not truly incur. Additionally, Wells Fargo employees also submitted applications for 565,444 credit card accounts without their customers' knowledge or consent. These bogus credit card accounts lead to roughly 14,000 of these accounts being charged for $400,000 in fees, including annual fees, interest charges and overdraft protection fees. Can you imagine the implications such delinquencies will have on one’s credit score and financial health? The CFPB reported that Wells Fargo will pay ''full restitutions to all victims. The bank agreed to pay $185 million in fines, along with $5 million to
Image of page 3

Subscribe to view the full document.

Page 4 refund customers. The bank was charged with the largest penalty since the CFPB was founded back in 2011.
Image of page 4
You've reached the end of this preview.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern