5,300 Wells Fargo employees fired for creating over 2 million phony accounts without customers knowing it
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Aussiesuede
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PostPosted: Wed Sep 21, 2016 2:37 pm    Post subject:

angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.
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lakersken80
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PostPosted: Wed Sep 21, 2016 2:40 pm    Post subject:

angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).


Doubtful of those numbers. Most people in general aren't that financially aware. If you look at the various fees they try to sink you with they are in the double digit numbers....I believe a single overdraft fee is around $39.....now if somebody is getting hit with a couple of those and you have a couple million or so accounts that a huge amount of money



People notice the overdrafts, they stick out like a sore thumb. One of the things the Internet brought to the masses was the abuse of subscription billing. All too many firms signed up folks for trial subscriptions, and never bothered cancelling the service, even after being given notification. When you have big recurring charges, but small service charges in the realm of $10 or less per month? No. I know that first hand, having been billed for months (even years) for services that escaped my attention. Further, many financial services companies will ask you to sign up for a "free" account that has no service charges, and no starting balance. All you have to do is look at the pile of junk mail you receive.

Reasonableness test: Do you really think 1.5 million accounts are going to generate enough revenue to impact 1% of Wells Fargo revenue growth?

$8.6 billion divided by 1.5 million accounts divided by 12 months = $480 (rounded) per month

No, this looks like shoddy management. Having consulted within this sector, I'm not terribly surprised.


Reality check...those $9 dollar fees you are talking about don't exist.
Just venture onto the Wells Fargo page if you want to see for yourself.
Those fees they charge are mostly in the double digit numbers and one can easily see how they can milk the consumers for all they've got.

https://www.wellsfargo.com/online-banking/service-fees/

Considering they were opening numerous accounts on just one customer one can easily see how they can milk somebody who isn't financially aware.
We are talking about the average person being in debt to the banks to the tune of 15k to the credit card companies so the average consumer isn't all that financially smart as you think they are.
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angrypuppy
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PostPosted: Wed Sep 21, 2016 2:56 pm    Post subject:

lakersken80 wrote:
angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).


Doubtful of those numbers. Most people in general aren't that financially aware. If you look at the various fees they try to sink you with they are in the double digit numbers....I believe a single overdraft fee is around $39.....now if somebody is getting hit with a couple of those and you have a couple million or so accounts that a huge amount of money



People notice the overdrafts, they stick out like a sore thumb. One of the things the Internet brought to the masses was the abuse of subscription billing. All too many firms signed up folks for trial subscriptions, and never bothered cancelling the service, even after being given notification. When you have big recurring charges, but small service charges in the realm of $10 or less per month? No. I know that first hand, having been billed for months (even years) for services that escaped my attention. Further, many financial services companies will ask you to sign up for a "free" account that has no service charges, and no starting balance. All you have to do is look at the pile of junk mail you receive.

Reasonableness test: Do you really think 1.5 million accounts are going to generate enough revenue to impact 1% of Wells Fargo revenue growth?

$8.6 billion divided by 1.5 million accounts divided by 12 months = $480 (rounded) per month

No, this looks like shoddy management. Having consulted within this sector, I'm not terribly surprised.


Reality check...those $9 dollar fees you are talking about don't exist.
Just venture onto the Wells Fargo page if you want to see for yourself.
Those fees they charge are mostly in the double digit numbers and one can easily see how they can milk the consumers for all they've got.

https://www.wellsfargo.com/online-banking/service-fees/

Considering they were opening numerous accounts on just one customer one can easily see how they can milk somebody who isn't financially aware.
We are talking about the average person being in debt to the banks to the tune of 15k to the credit card companies so the average consumer isn't all that financially smart as you think they are.



Reality check #1: Those are transnational fees, not monthly service charges.

Reality check #2: The fraudulent activity is the opening of accounts, not the transactions within those accounts.
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lakersken80
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PostPosted: Wed Sep 21, 2016 3:02 pm    Post subject:

angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).


Doubtful of those numbers. Most people in general aren't that financially aware. If you look at the various fees they try to sink you with they are in the double digit numbers....I believe a single overdraft fee is around $39.....now if somebody is getting hit with a couple of those and you have a couple million or so accounts that a huge amount of money



People notice the overdrafts, they stick out like a sore thumb. One of the things the Internet brought to the masses was the abuse of subscription billing. All too many firms signed up folks for trial subscriptions, and never bothered cancelling the service, even after being given notification. When you have big recurring charges, but small service charges in the realm of $10 or less per month? No. I know that first hand, having been billed for months (even years) for services that escaped my attention. Further, many financial services companies will ask you to sign up for a "free" account that has no service charges, and no starting balance. All you have to do is look at the pile of junk mail you receive.

Reasonableness test: Do you really think 1.5 million accounts are going to generate enough revenue to impact 1% of Wells Fargo revenue growth?

$8.6 billion divided by 1.5 million accounts divided by 12 months = $480 (rounded) per month

No, this looks like shoddy management. Having consulted within this sector, I'm not terribly surprised.


Reality check...those $9 dollar fees you are talking about don't exist.
Just venture onto the Wells Fargo page if you want to see for yourself.
Those fees they charge are mostly in the double digit numbers and one can easily see how they can milk the consumers for all they've got.

https://www.wellsfargo.com/online-banking/service-fees/

Considering they were opening numerous accounts on just one customer one can easily see how they can milk somebody who isn't financially aware.
We are talking about the average person being in debt to the banks to the tune of 15k to the credit card companies so the average consumer isn't all that financially smart as you think they are.



Reality check #1: Those are transnational fees, not monthly service charges.

Reality check #2: The fraudulent activity is the opening of accounts, not the transactions within those accounts.


Why do you think they were opening excess accounts in the first place? It wasn't because they were being good corporate citizens. They had to meet quotas and we know that customers slip up and end up generating excess fees for the bank.
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angrypuppy
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PostPosted: Wed Sep 21, 2016 3:07 pm    Post subject:

lakersken80 wrote:
angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
lakersken80 wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).


Doubtful of those numbers. Most people in general aren't that financially aware. If you look at the various fees they try to sink you with they are in the double digit numbers....I believe a single overdraft fee is around $39.....now if somebody is getting hit with a couple of those and you have a couple million or so accounts that a huge amount of money



People notice the overdrafts, they stick out like a sore thumb. One of the things the Internet brought to the masses was the abuse of subscription billing. All too many firms signed up folks for trial subscriptions, and never bothered cancelling the service, even after being given notification. When you have big recurring charges, but small service charges in the realm of $10 or less per month? No. I know that first hand, having been billed for months (even years) for services that escaped my attention. Further, many financial services companies will ask you to sign up for a "free" account that has no service charges, and no starting balance. All you have to do is look at the pile of junk mail you receive.

Reasonableness test: Do you really think 1.5 million accounts are going to generate enough revenue to impact 1% of Wells Fargo revenue growth?

$8.6 billion divided by 1.5 million accounts divided by 12 months = $480 (rounded) per month

No, this looks like shoddy management. Having consulted within this sector, I'm not terribly surprised.


Reality check...those $9 dollar fees you are talking about don't exist.
Just venture onto the Wells Fargo page if you want to see for yourself.
Those fees they charge are mostly in the double digit numbers and one can easily see how they can milk the consumers for all they've got.

https://www.wellsfargo.com/online-banking/service-fees/

Considering they were opening numerous accounts on just one customer one can easily see how they can milk somebody who isn't financially aware.
We are talking about the average person being in debt to the banks to the tune of 15k to the credit card companies so the average consumer isn't all that financially smart as you think they are.



Reality check #1: Those are transnational fees, not monthly service charges.

Reality check #2: The fraudulent activity is the opening of accounts, not the transactions within those accounts.


Why do you think they were opening excess accounts in the first place? It wasn't because they were being good corporate citizens. They had to meet quotas and we know that customers slip up and end up generating excess fees for the bank.



They were opening new accounts as management were eying them as a source of legit revenue, not penny ante fraud. That's normal practice in any financial services firm, and even any business services firm: You land an account, and you try to grow it from something small into something big via cross sales and up-sales. That is via transnational activity, which has not been alleged as part of the fraud.
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JerryMagicKobe
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PostPosted: Wed Sep 21, 2016 5:15 pm    Post subject:

WF charges $10 per month for a checking account and $5 per month for a savings. There are a lot of ways to get that fee waived, so a smart banker could set up a savings account, link it to an existing checking account to avoid the monthly fee while helping themselves meet their sales quota. The last thing the bankers want is for a fee to be charged which would potentially alert the customer and result in a complaint. That is why this was able to go on since 2011. Over time, the customers might alter their banking relationship which would then trigger a fee on an account they didn't realize they had, eventually bringing this practice to light. These bankers were sneaky and not truthful, but there was not a company-wide conspiracy to generate additional fees for Wells Fargo. Just the opposite. They wanted to meet their goals without attracting attention, and nothing attracts attention like unwarranted fees.

Wells Fargo should incentivize new customer relationships and deepening existing relationships with other (non-deposit) items like car loans, credit cards, investments and home loans.

They should also do a much better job of supervision. The bank manager should review the new accounts, introduce themselves to the customer and make sure that everything was properly explained.

Simple.
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ringfinger
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PostPosted: Wed Sep 21, 2016 5:23 pm    Post subject:

the association wrote:
ringfinger wrote:
the association wrote:
What about circumstantial evidence? Are we only using that as a prosecutorial tool against the folks in steerage? FFS, isn't it reasonable to assume that someone deserving of that type of compensation package (at the helm of an organization that massive) should be expected to KNOW, to take responsibility for the actions of his organization? You know, the people under his leadership. I mean, what's the alternative? Some kind of "all of the upside opportunity, none of the downside risk" universe where nobody is actually held accountable ... ?

In essence, you're arguing that nobody should ever be charged with receiving (or possession of) stolen property as long as it cannot be proven beyond a reasonable doubt that they explicitly authorized the specific theft(s) themselves. Ignorance of the law isn't a defense in criminal courts. How many (bleep) times have we heard that precept when the defendant isn't a Fortune 100 executive ... ?

No, (bleep) that noise ... at minimum, some flavor of fraudulent conveyance ... remand that sack of protoplasm somewhere for a while (not the Maldives or St. Bart's).


Ehhh, you're just more interested in putting the guy with the money in jail than actually achieving true justice. Look at the way you post for instance.

Would you be in favor of putting the 5,300 employees who actually did the illegal behavior in jail?

How about the hundreds if not thousands of their DIRECT day-to-day managers?

How about dozens of middle to senior level management above them too while we're at it?

Or just that one guy who may not even have known what was going on?


Your entire (bleep) defense of this mouthbreather is based on the flimsy bolded statement above ...

He may not have known. He may not have known. Really ... ?

So if he knew of the scheme, he's clearly violated codified criminal statutes. I'm assuming we can agree on that position. And if he didn't know of the scheme, his incompetence as leader of a multi-national Fortune 100 company demands that he resign his office immediately, fully remunerate WFB shareholders and customers for his failure to uphold his fiduciary responsibilities, and hit the (bleep) bricks already. And I'm assuming we can agree on that position, as well.

As to your questions, yes ... anybody who knowingly participated or benefitted from this scheme (because that's exactly what the (bleep) this artifice was ... a (bleep) scheme to enrich themselves at the expense of others) should be held to the same criminal justice standard that anyone else outside this 1% bubble would face if caught violating the law ... if that's 5,000+ WFB employees brought to the woodshed, oh (bleep) well ... and if the Courts decide to mete out incarceration as part of their judicial penance, oh (bleep) well ...

I'm mindful of the distinction between vengeance and justice. I'm also content with the knowledge that rational minds like Elizabeth Warren (and ChefLinda FTW) are with me on the right side of history ... on the other hand, feebly defending bankers who wouldn't give you the time of (bleep) day seems like a really sad journey ... but at least you and Reflexx can provide one another company.


I'm not defending the guy. I've already said that the fact this occurred under his watch makes him, in my eyes, incompetent. And as a result, he should resign (or be forced out) and I'd have no qualms with him having to forfeit any bonuses.

But being a mouthbreather and/or incompetent isn't a crime in my view. So until more evidence comes out, I'm just not prepared to say he's a criminal. He may very well be. All I'm asking for is a few witnesses to testify they told him about what's going on and he did nothing about it. Maybe an email or two.
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Reflexx
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PostPosted: Wed Sep 21, 2016 5:25 pm    Post subject:

lakerjoshua wrote:
Reflexx wrote:
ChefLinda wrote:
5,000 employees don't coincidentally act on the same scheme unless it was coordinated from the top. This is another example of the 1% screwing everyone else, including their own employees who were doing their bidding for $15/hour while they pocketed the spoils.

Elizabeth Warren had it right. The CEO should give consumers back the money then resign or go to jail.


5000 people sure could come up with the same scheme.

It wasn't exactly a complex or creative scheme. It's pretty much what you'd expect any dishonest person with a sales quota to try to do.

I'd be surprised if there weren't procedures in place to safeguard against this. But those procedures may have been overlooked or ignored.


I wasn't going to share this but my wife was a PB1 at Wells for 5 years (no she never needed to open fake accounts as we are pretty well set financially). There was more than one instance where she didn't hit her quota and was threatened by management that she'd be fired. There were also conversations between her and her manager where she was told "do whatever it takes" in regards to improving her sales performance. It was also pretty well know in the branch that this was the practice and when she didn't do it they would assign her to crappy on-site branches and given Saturday open/close shifts as retaliation.

So yes. It came from the top.

Fyi they would also open accounts for underage minors using a fake passport number instead of a social security number, makes me wonder how many thousands of those dummy accounts there are floating around out there.


I don't doubt this kind of behavior would be encouraged if no safeguards were in place.

If management ignored safeguards, then they should be prosecuted.

If there were no processes/safeguards existing at all, that is organizational incompetence and a lot of policy-making higher-ups should lose their jobs.
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JerryMagicKobe
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PostPosted: Wed Sep 21, 2016 5:29 pm    Post subject:

Aussiesuede wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.

That seems a lot more reasonable.
There is no way that the CEO of Wells Fargo knew that some front line employees were exploiting a loop hole in a misguided attempt to meet their stupid sales goals. Firing him would not improve the current environment nor prevent the next one from happening.

Make restitution to the customers, remove these incentives and install a system to make sure that customers understand the details of all accounts opened.

The customers themselves will vote with their wallets to decide the rest.
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Reflexx
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PostPosted: Wed Sep 21, 2016 5:29 pm    Post subject:

angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2% of revenue, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).


I think you've pointed out the most likely scenario.

This kind of stuff is small potatoes to the big wigs, but at the per-branch level it could mean promotions or just keeping a job. Managers will set unrealistic expectations, and if just 1 person scams their way to it then it gives management the idea that it's not unrealistic because Billy or Joe over there manages to do it.

But these things really should be caught in audits.
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Reflexx
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PostPosted: Wed Sep 21, 2016 5:30 pm    Post subject:

Aussiesuede wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.


I personally don't think we should seize the property owner's property for something he didn't do.
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PostPosted: Wed Sep 21, 2016 6:25 pm    Post subject:

Reflexx wrote:
Aussiesuede wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.


I personally don't think we should seize the property owner's property for something he didn't do.


Neither do I. But which ever way the shoe falls, it needs to fall consistently. The mindset behind having a property owner be responsible for the actions of his tenant and be the one who ultimately suffers the greatest loss in having his property seized is that "The buck stops with him and if he knows that he'll take whatever measures necessary to vigorously monitor the property to make sure nothing untowards is at hand. If were are going to apply that concept there, then in makes even more sense to apply it to the Executives of a business. Ultimately, they too must be held accountable for the actions of their subordinates. If, as a society, we choose the other route,and not holding the executives culpable for the unknown actions of their subordinates - then too must we stop holding the property owner accountable for the unknown actions of his unrelated tenants.
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PostPosted: Wed Sep 21, 2016 6:34 pm    Post subject:

Aussiesuede wrote:
Reflexx wrote:
Aussiesuede wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.


I personally don't think we should seize the property owner's property for something he didn't do.


Neither do I. But which ever way the shoe falls, it needs to fall consistently. The mindset behind having a property owner be responsible for the actions of his tenant and be the one who ultimately suffers the greatest loss in having his property seized is that "The buck stops with him and if he knows that he'll take whatever measures necessary to vigorously monitor the property to make sure nothing untowards is at hand. If were are going to apply that concept there, then in makes even more sense to apply it to the Executives of a business. Ultimately, they too must be held accountable for the actions of their subordinates. If, as a society, we choose the other route,and not holding the executives culpable for the unknown actions of their subordinates - then too must we stop holding the property owner accountable for the unknown actions of his unrelated tenants.


I think that works better when you're talking about a small business, where the offending employee is one degree away from the business owner.

But when you're talking about a massive corporate entity, sometimes those two people are 10+ levels apart and have never spoken. The one who does see the offending employee every day, who is responsible for that employee's day-to-day actions and responsibilities, is the manager.

McDonald's drive-through guy punches customer in the face. It's caught on video and clearly and unprovoked assault.

Does it really make sense for Steve Easterbrook (CEO of McDonalds) to go to jail? Would it even make sense for the hiring manager of the offending employee to be held responsible?

And then sometimes, the CEO isn't even the person at the top. It is the shareholders to whom he/she reports. Are they responsible at all for the low level employees too?
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PostPosted: Thu Sep 22, 2016 7:27 am    Post subject:

Quote:
McDonald's drive-through guy punches customer in the face. It's caught on video and clearly and unprovoked assault.

Does it really make sense for Steve Easterbrook (CEO of McDonalds) to go to jail? Would it even make sense for the hiring manager of the offending employee to be held responsible?

And then sometimes, the CEO isn't even the person at the top. It is the shareholders to whom he/she reports. Are they responsible at all for the low level employees too?


If McDonalds based their bonuses and promotions on how many customers they could punch at the drive through window then yes, they should be held liable.
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PostPosted: Thu Sep 22, 2016 8:13 am    Post subject:

- Those 5K+ employees need to pay back any bonuses that they received.
- They either go to jail for ~60 days or they could cooperate with officials on who they are getting their orders for the fraud. They can do 240 hours of community service if they don't want to go to prison. Again, cooperation would bring that number way down.
- The higher up the chain, the more penalties.
- Enable a whistleblower system that actually is effective.
- Set up an HR mechanism to protect the employee from this type of abuse, and if they are pushing someone to do something illegal. HR must be mandated by law to report any type of impropriety, or be subject to prison time.

It seems extreme, but that's one of the only ways to prevent this ish from happening again.
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PostPosted: Thu Sep 22, 2016 8:14 am    Post subject:

Aussiesuede wrote:
Reflexx wrote:
Aussiesuede wrote:
angrypuppy wrote:
The unrealistic sales quotas came from the top, but let's not get carried away with the charges of fraud. The bank was fishing for new accounts so that they could grow revenue and profitability over time.

Before we get out the pitchforks, try a quick reasonableness test:

Many accounts probably didn't generate any revenue, but for sake of argument, let's just pretend that all 1.5 million accounts made money. That amount is probably small on a per account basis, the nickel and dime stuff that shows up on your statement that you figure isn't worth your trouble to investigate. Let's say it's $9 per month, as double digit numbers attract more attention.

1.5 million times $9/month times 12 months/year = $162 million

While that sounds astounding, it really isn't. Wells Fargo revenues topped $86 billion last year. On a percentage basis, the fraud is less than 0.2%
, and in fact I expect the real number to be less per annum. This is penny ante (bleep).


Commercial banking is a very mature industry; that's a fancy way to describe that growth prospects were low. Senior management decided to pull a General Patton and threaten the lowly bank branch employees with termination, unless they hit unrealistic numbers. My guess is that the goals were assembled by some middle manager in a rather sloppy manner, and weren't vetted. I'd like to see an investigation, but this smells more like incompetence than some nefarious scheme. Unfortunately I see the branch employees holding the bag, as well as some of the lower corporate folks (note: many lower employees in a commercial bank have a VP title).



If a property owner can have his property seized due to the actions of a drug dealing tenant, even though he lives in another state and has no clue of the illicit activity, then a CEO definitely bears responsibility for the illicit activity that goes on in his house as well. If we don't desire to hold that CEO responsible, then too we must stop seizing the property of that non resident homeowner when he has no idea of the illicit activity occurring on his non resident property. Either the guy at the top is responsible or he isn't. We just need to be consistent.


I personally don't think we should seize the property owner's property for something he didn't do.


Neither do I. But which ever way the shoe falls, it needs to fall consistently. The mindset behind having a property owner be responsible for the actions of his tenant and be the one who ultimately suffers the greatest loss in having his property seized is that "The buck stops with him and if he knows that he'll take whatever measures necessary to vigorously monitor the property to make sure nothing untowards is at hand. If were are going to apply that concept there, then in makes even more sense to apply it to the Executives of a business. Ultimately, they too must be held accountable for the actions of their subordinates. If, as a society, we choose the other route,and not holding the executives culpable for the unknown actions of their subordinates - then too must we stop holding the property owner accountable for the unknown actions of his unrelated tenants.


If we're going to be consistent, we should be advocating it going the OTHER way.

I'm not going to advocate screwing over more innocent people in the name of consistency.
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PostPosted: Thu Sep 22, 2016 8:16 am    Post subject:

lakerjoshua wrote:
Quote:
McDonald's drive-through guy punches customer in the face. It's caught on video and clearly and unprovoked assault.

Does it really make sense for Steve Easterbrook (CEO of McDonalds) to go to jail? Would it even make sense for the hiring manager of the offending employee to be held responsible?

And then sometimes, the CEO isn't even the person at the top. It is the shareholders to whom he/she reports. Are they responsible at all for the low level employees too?


If McDonalds based their bonuses and promotions on how many customers they could punch at the drive through window then yes, they should be held liable.


How about if employees stole credit cards and made purchases to make their store look more successful?
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PostPosted: Thu Sep 22, 2016 9:15 am    Post subject:

Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?




What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?
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PostPosted: Thu Sep 22, 2016 9:41 am    Post subject:

lakerjoshua wrote:
Quote:
McDonald's drive-through guy punches customer in the face. It's caught on video and clearly and unprovoked assault.

Does it really make sense for Steve Easterbrook (CEO of McDonalds) to go to jail? Would it even make sense for the hiring manager of the offending employee to be held responsible?

And then sometimes, the CEO isn't even the person at the top. It is the shareholders to whom he/she reports. Are they responsible at all for the low level employees too?


If McDonalds based their bonuses and promotions on how many customers they could punch at the drive through window then yes, they should be held liable.


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PostPosted: Thu Sep 22, 2016 9:46 am    Post subject:

angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?


What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


I think what you guys are showing, is that unlike what extremists on the left and right want to believe, there isn't a single rule that applies to all situations. It doesn't always make sense to hold the "top dog" responsible for any and all actions of the people in his organization. It also doesn't always make sense to never hold him/her responsible either.

Each circumstance warrants a fresh and unique look.
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PostPosted: Thu Sep 22, 2016 9:47 am    Post subject:

angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?


What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


Unethical, sure. But it's also something venture capitalists look into. Unless those employees are completely blowing their paychecks and take out personal loans every month for an extended period of time, it's not going to result in much funding, if any.

That money could have just been used as capital.

Not sure how this pertains to anything.
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PostPosted: Thu Sep 22, 2016 9:53 am    Post subject:

ringfinger wrote:
angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?


What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


I think what you guys are showing, is that unlike what extremists on the left and right want to believe, there isn't a single rule that applies to all situations. It doesn't always make sense to hold the "top dog" responsible for any and all actions of the people in his organization. It also doesn't always make sense to never hold him/her responsible either.

Each circumstance warrants a fresh and unique look.


The appropriate time to hold the top dog responsible... is when they were respinsible for it.

If they had no idea it was going on through no fault of their own, but through unscrupulous secretive behavior from those several levels removed, then they really aren't criminally responsible.

I can see an argument that safeguards shouls have been in place for stuff that was a somewhat obvious risk. If there were no safeguards, then the top dog may lose his job.
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PostPosted: Thu Sep 22, 2016 10:02 am    Post subject:

angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?




What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


Fortunately I no longer am employed by NatureBox
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PostPosted: Thu Sep 22, 2016 10:06 am    Post subject:

Reflexx wrote:
angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?


What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


Unethical, sure. But it's also something venture capitalists look into. Unless those employees are completely blowing their paychecks and take out personal loans every month for an extended period of time, it's not going to result in much funding, if any.

That money could have just been used as capital.

Not sure how this pertains to anything.



It's just a lead into a far more fun scandal:

How Hampton Creek Sold Silicon Valley on a Fake-Mayo Miracle

Quote:
In August the U.S. Securities and Exchange Commission and the Justice Department launched probes of Hampton Creek for possible securities violations and criminal fraud. The investigation follows an Aug. 4 Bloomberg article that revealed the company deployed a national network of contractors to secretly buy back Just Mayo from grocery store shelves. Hampton Creek denies any wrongdoing. When news of the SEC inquiry became public, the company’s founder and chief executive officer, Josh Tetrick, wrote in an e-mail, “We’re aware of the informal inquiry and we’ll be sharing the facts, as opposed to the inaccuracies reported by Bloomberg.” The company declined to comment on the DOJ investigation.

Tetrick used supermarket sales figures much as he used the environmental claims—to raise venture capital from a cast of billionaires including Salesforce.com founder Marc Benioff, tech investor Vinod Khosla, Hong Kong developer Li Ka-shing, and entrepreneur and venture capitalist Peter Thiel. Investments in the company have reached almost $220 million, he told his employees in an all-hands meeting a few days after the Bloomberg article appeared.



Quote:
In January 2014 a Creeker (edit note: company employee) on the West Coast, who asked not to be identified, received an assignment in an e-mail under the subject line “Secret Shopper Squad Stores.” She was directed to buy 20 bottles a week of Just Mayo from each Whole Foods store in a large territory. She was also told to hide what she was really doing. Under the heading “BACKSTORY,” the e-mail said, “You are working for a catering service, which chooses Just Mayo because of its amazing taste and because it is really good for people with allergies. We avoid saying the word vegan because we want everyone to think of Just Mayo as a mainstream mayo.”

After the secret purchases, the e-mail instructed, she should open one or two bottles at home to check for quality—specifically, whether the mayonnaise had separated. If the jars were all right, she could donate the rest to a food bank or give it to friends. “Do not return them to Whole Foods,” the e-mail said. It also included a link to a quality-assurance survey the Creeker was supposed to fill out for each store. But no one noticed when she didn’t do it. Within weeks she had bought so much Just Mayo that her friends and local food banks couldn’t handle any more, so she began dumping it. She spent almost $12,000 purchasing the product, she says, and she could tell the buybacks had nothing to do with quality control. “But I really didn’t think about it because I cared so much about the cause.”

With the buyback program in full swing, Tetrick celebrated the product’s success. “Wow! Some @WholeFoods are selling 100+ jars of #justmayo/day,” he tweeted on Jan. 30. Four months later, a company tweet said: “Proud to announce that #justmayo is now the #1 selling mayo at @wholefoods.”

By then, Tetrick had moved on to a much bigger conquest: Safeway stores. On April 22, Caroline Love, who ran Hampton Creek’s corporate partnerships and is now vice president for mission, sent an e-mail to a group of Creekers who’d been specially selected, she said, for the Safeway assignment. First, she thanked the unit, which became known inside Hampton Creek as the special projects group, for their “hard work in Whole Foods.” Then she tried to inspire them. “We are winning because of you,” she wrote. “We are reinventing the food system because of you. We are changing the world because of you.”

“This is mainstream,” she continued. To ensure “huge sales out of the gate” and “put an end to Hellmann’s factory-farmed egg mayo,” Love gave the Creeker elite five days to purchase “at least” 12 jars of Just Mayo at Safeway stores assigned to them. Use the self-checkout lane or multiple cashiers to avoid suspicion, she instructed. And don’t wear Hampton Creek gear—“This is an undercover project.” There was no pretense of quality monitoring. Subsequent assignments were for 20 jars per store.



Quote:
Ali Partovi suspected something was wrong shortly after joining Hampton Creek in September 2014. He and his twin brother, Hadi, are among Silicon Valley’s most successful angel investors. Their parents, scientists from Iran, fled the Islamic Republic when the boys were 11. Both earned computer science degrees at Harvard. In the 1990s, Hadi co-founded Tellme Networks, which he sold to Microsoft for $800 million; Ali co-founded LinkExchange, which Microsoft bought for $265 million. The brothers were early investors in Dropbox, Facebook, and Airbnb, among other companies, and founded the nonprofit Code.org, which promotes programming instruction in U.S. public schools.

A big believer in greening the food chain, and now an investor in Hampton Creek competitor Clara Foods, Ali Partovi grew smitten with Hampton Creek after meeting with Tetrick in 2013 and seeing his pitch deck. The Partovis invested in Hampton Creek in 2014. That September, Ali joined the company as a senior executive. His main responsibility was fundraising, particularly helping land Hampton Creek a “tech company valuation” in its next round, e-mails show.

Partovi dug in to the company’s financials. A week later, he sent Tetrick an e-mail documenting his belief that Hampton Creek was misleading investors and board members and risking potential fraud lawsuits. As of that August, the company was on pace to have less than $4 million in sales in 2014, not the $28 million projected in the pitch deck, and it was losing more than $2 million a month, according to an internal P&L statement. Partovi recommended revising the 2014 sales forecast for investors to $7 million to $9 million. Deceiving investors is a big mistake, he warned Tetrick. “This path is especially dangerous because the farther one goes down it, the harder it is to pull back,” he wrote. “Hadi and I personally feel duped.”


https://www.bloomberg.com/features/2016-hampton-creek-just-mayo/



The article is a tad ponderous, but it's a fun read. Despite the superficial attempt to make it look like a QC operation, the founder/CEO was clearly trying to dupe the investors in an attempt to lure more capital. It's almost comical.


The Wells Fargo case is more tragic than comical. The analogies in this thread are missing something key: You can go after management if they knew their sales targets were fraudulent. You can't go after management if they were blindly following bad numbers, and proving something akin to gross negligence by management will be a monumental task for the prosecutors. That's what makes it tragic, the branch minions were just fearing job loss, and thus pressured (but certainly not ordered) to commit fraud.
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PostPosted: Thu Sep 22, 2016 10:18 am    Post subject:

Reflexx wrote:
ringfinger wrote:
angrypuppy wrote:
Reflexx wrote:


How about if employees stole credit cards and made purchases to make their store look more successful?


What if a startup food company ordered employees to go buy their products off the shelves of a major grocery chain, to artificially inflate revenues, enabling them to lure additional financing from venture capitalists?


I think what you guys are showing, is that unlike what extremists on the left and right want to believe, there isn't a single rule that applies to all situations. It doesn't always make sense to hold the "top dog" responsible for any and all actions of the people in his organization. It also doesn't always make sense to never hold him/her responsible either.

Each circumstance warrants a fresh and unique look.


The appropriate time to hold the top dog responsible... is when they were respinsible for it.

If they had no idea it was going on through no fault of their own, but through unscrupulous secretive behavior from those several levels removed, then they really aren't criminally responsible.

I can see an argument that safeguards shouls have been in place for stuff that was a somewhat obvious risk. If there were no safeguards, then the top dog may lose his job.


Exactly. I'm in total agreement there.

I'm totally befuddled by this "one gear" movement we're seeing lately.

Maybe its an over correction, to the "one gear" movement going the other way we had seen in the past.
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