Banks Are, Generally, Well, Trouble

We are still cleaning up bank messes from 7 years ago as we find ourselves in yet another.  It was 2016 when the news hit that all the new accounts Wells Fargo was boasting about were not real.  By the time the dust settled, regulators found 3.5 million fake accounts.  The Barometer would have gone into business if she had understood you can just make stuff up.

And the Wells scandal broke just 8 years after we lost Lehman and Wachovia and a host of other financial institutions in 2008.

Now, as banks were folding right and left over the past 10 days, Wells Fargo’s former head of community banking, Carrie Tolstedt, agreed to enter a guilty plea to obstructing regulators. The allegations were that Ms. Tolstedt knew of the Wells “fakery” as early as 2004, but kept it quiet. The regulators, ever slow on the uptake, were trying to figure out the fake account scandal.

Wells paid $3 billion to settle the charges of faking accounts.  Ms. Tolstedt could serve up to 16 months in prison.

Now we are facing Silicon Valley Bank, Signature Bank, First Republic Bank, and Credit Suisse, the banks on the brink. Despite clean audit opinions these banks somehow ran out of money.  Go figure.  No worries — we will sort through it all over the next seven years — about the time the next scandal breaks wide open.

Dave Michaels, “Ex-Wells Executive to Enter Guilty Plea,” Wall Street Journal, March 16 2023, p. B10.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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2 Responses to Banks Are, Generally, Well, Trouble

  1. John Corrigan says:

    Back in the days when getting it right was the rule, you had to settle the day’s activities before you went home. It helped if people had a moral, or ethical sense about doing a good job, or a more practical sense of not wanting to get fired. All of that ended in the ’60’s when morality and ethics were moved aside so that progressivism could be installed. “Close enough for government work” was the new rule. “We don’t need no stinkin’ whatever”, like punishment for crime, stable family relationships, married mothers, etc., etc. What could possibly go wrong, now that the new morality was going to take over? We “old heads” told them, but they didn’t listen. Good luck putting the morality toothpaste back into the tube of life.

  2. mmjdiary says:

    What could possibly go wrong in a society that cannot even acknowledge truth? Well, we’re looking at it.

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