How to Scandal-Proof Your Company
by Paul Healy and George Serafeim
IN THE LATE SUMMER of 2016 allegations that employees of Wells Fargo’s retail banking unit had opened more than a million unauthorized accounts and sold customers thousands of unneeded products hit the national news. The scandal cost Wells Fargo dearly. On September 8 the Consumer Financial Protection Bureau (along with the Office of the Comptroller of the Currency and the City and County of Los Angeles) fined the company $185 million—and after revelations of more consumer abuses came out, Wells Fargo would later be fined an additional $1 billion and shell out $575 million to settle legal claims. By the end of September, the bank’s stock price had fallen 13%, slashing Wells ...
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