Despite the mercurial moral nature of most politicians, they can always be counted on for at least one thing—making a bad situation worse. Not that we’re about to stand in defense of Wells Fargo and its reprehensible shareholder screw job, but what possible good can come from Elizabeth Warren’s latest letter-writing campaign.
The hyper-liberal senator from the East Coast Commonwealth recommended investigations recently into alleged comments made by some of the country’s largest insurance and financial services companies. The latter had the temerity to inform clients of their views on the likely impact of the fiduciary rule which, given Warren’s reaction, might easily be confused with a RICO violation.
When former SEC chair Mary Jo White failed to respond to one of her missives in a suitable manner, the senator went so far as to write then-President Obama to urge him to fire the insubordinate White. Let’s hope the AHCA covers Carpal Tunnel.
On Monday, CNBC reported that Warren is now “calling for the ouster of 12 board members at Wells Fargo due to the fake accounts scandal that has rocked the bank.”
“In a letter sent Monday to Federal Reserve Chair Janet Yellen, the Massachusetts Democrat said the scandal has ‘revealed severe problems with the bank’s risk management practices,’” according to the network. “Warren said the central bank has the authority under federal statute to remove the members who were on the board as the matter transpired.”
The weird thing is that even Warren acknowledges the company has already received a multitude of clawbacks, firings, and fines, with the senator’s own Consumer Financial Protection Bureau levying a record $100 million against Wells Fargo just last fall.
Yet in a scene reminiscent of the Airplane classic, she’s now encouraging the Federal Reserve to grab a crowbar and get in line.
Thankfully, the firing of an entire board at a large national bank is unprecedented and unlikely to happen, and even if it was, how could such drastic action possibly be good for shareholders and bank customers?
It couldn’t, which is the point. She’s once again harming the very people she claims to help. Call it another notch in Warren’s political enrichment belt, all at the expense of investors and yes, 401k plan participants; those unlucky enough to hold Wells Fargo somewhere in their retirement portfolios.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
The problem, as I see it, is that as long as no individuals are held accountable, this type of behavior by large corporations will continue, with the fines that seem large to the average person just a “cost of doing business”. Removal from their boards would be a start. But fraud should be met with jail time. Just sayin’.
It appears you didn’t read the article. MANY people were held accountable–the CEO was fired for crying out loud. No customer lost a penny in this “scandal”. I understand there were accounts opened in a fraudulent way. But I agree with the author—women like Elizabeth Warren just can’t let themselves down off their soapbox. It’s not about what’s good for the customer or shareholder, it’s about what gets Warren the most publicity.
So…to be clear Andrew….is this a ‘women’ problem?
So let’s just let those who are “responsible” to customers and shareholders of the bank and victims of the gross fraud by Wells employees just keep making large amounts of income with no accountability or judgement….because “the firing of an entire board at a large national bank is unprecedented” maybe it is time it was precedented…then maybe more corporate boards will be more aware of the firms practices perpitrated upon society–this fraud is one of the most unprecedented in history…I like very little about Senator Warren and her position on most matters…but Ms. Warren needs to make more noise on this one!
Wells Fargo was little more than a criminal organization. The fines and clawbacks amount to a tiny slap on the wrist. Either the board turned a blind eye to these criminal activities, or they are totally clueless. In either case they should be promptly replaced. Additionally, where does it say the shareholders and employee should be rewarded for criminal activities?
You know, I just wish the Federal Government would show as much disgust for the improprieties that take place on a regular basis within their own ranks. We sure get things buried under the rug in a hurry with that group!
I’m just a small employee of a very large organization at Wells Fargo but what I see is a lot of people doing what’s right every day, managers who go out of their way to make sure employees do the right things for their customers, whole divisions volunteering countless hours in community service and a company that donates a ton of money to make our communities, the nation. and the world a better place. Funny how nobody talks about that.
I think good leaders celebrate the good that people do and encourage more of it. Elizabeth Warren would be wise to do the same!!!