A recent survey of money managers over a six-week period by Barron’s published a survey of 100 U.S. companies, ranking them from the most to the least respected. Leading the list were tech companies, such as Google parent Alphabet and Apple as well as online retailer Amazon. At the bottom of the heap is (drum roll, please) Wells Fargo.
Considering Wells Fargo’s shenanigans in recent years, this comes as little surprise. Back in the spring of 2014, as the largest mortgage servicing company in the nation, Wells Fargo was caught with its pants down when it was discovered to have come up with its own methods to fabricate foreclosure papers. The bank actually created a 150-page manual for foreclosure attorneys in November 2011, showing them how to fraudulently come up with “paperwork” in order to “prove” that the company owns the mortgage in question – and therefore, can summarily evict a family and take their home. That document was continually updated over their years in order to reflect “changing laws, regulations and foreclosure procedures.”
Shortly before this scandal was uncovered, Wells Fargo and four other major financial institutions had paid out $25 billion in penalties in order to settle charges of “preparing, executing, notarizing or presenting false and misleading documents” that resulted in the “loss of homes due to improper, unlawful or undocumented foreclosures.” Apparently, Wells Fargo failed to learn its lesson.
Last year, the Consumer Financial Protection Bureau discovered that the banking giant was pressuring its employees to create fraudulent accounts for its customers, including credit applications. The scheme involved transferring money from legitimate accounts to the “dummy” ones, causing customers to overdraw so the company could collect more fees. Wells Fargo’s activities eventually drew scrutiny from the Senate Committee & House Panel, which began its own investigation in September 2016.
Ultimately, the company’s CEO was forced to resign, while the employees who carried out the scheme were fired. Wells Fargo paid out another $185 million in penalties and $5 million in restitution to his customers, a drop in the bucket compared to the company’s nearly $2 trillion in assets. Of course, the executive who was directly responsible for supervising the employees who created the fraudulent accounts walked away with no consequences – along with a $124 million severance check in her pocket.
But that’s just business as usual in today’s Corporate America. Nevertheless, despite Wells Fargo’s attempts to repair its tarnished public image, financial managers today now rank it at the bottom of a dismal heap.
Wells Fargo isn’t alone in having been hurt by scandal in recent years. Joining it in Barron’s dung heap is General Motors, which dropped to Number 88 in the wake of an issue involving faulty ignition-switches that killed 124 people and injured 275. Below that in the Number 89 spot is 20th Century Fox, parent company of FAUX News, which is now embroiled in numerous lawsuits over sexual harassment and racial and gender discrimination.
But Wells Fargo is by far the biggest loser, dropping from its lofty position at Number 7 only two years ago to being the most disrespected company in the nation. Oh, how the mighty have fallen.=