Wells Fargo

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#21
(11-09-2016, 09:06 PM)CityFarmer Wrote:
(11-09-2016, 06:01 PM)touzi Wrote: The Chinese cheat out of pure greed. Americans cheat because the system put so much pressure on short term performance. The Japanese cheat because of peer pressure. Which is more scary?

The most scary one, is the statement, which is stereotype at best, or discrimination at worst  Big Grin

I will say, all cheat, is out of greed (for wealth, power, recognition etc), and having same level of scary, IMO.

How is this discrimination? Did I say all Chinese/Americans/Japanese are cheats? 

And no, not everyone involved in cheating do it out of greed. The Korean Lotte and the Japanese Olympus scandals are examples of people falling to peer pressure. (And before I am accused of stereotyping, that does not mean everyone in these scandals are victims of peer pressure).
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#21
(11-09-2016, 09:06 PM)CityFarmer Wrote:
(11-09-2016, 06:01 PM)touzi Wrote: The Chinese cheat out of pure greed. Americans cheat because the system put so much pressure on short term performance. The Japanese cheat because of peer pressure. Which is more scary?

The most scary one, is the statement, which is stereotype at best, or discrimination at worst  Big Grin

I will say, all cheat, is out of greed (for wealth, power, recognition etc), and having same level of scary, IMO.

How is this discrimination? Did I say all Chinese/Americans/Japanese are cheats? 

And no, not everyone involved in cheating do it out of greed. The Korean Lotte and the Japanese Olympus scandals are examples of people falling to peer pressure. (And before I am accused of stereotyping, that does not mean everyone in these scandals are victims of peer pressure).
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#22
Was the Japanese Olympus scandal due to peer pressure? Were those involved, receive any benefits from the act? How they did with the benefits? The answers will determine whether a case of greed, or peer pressure, IMO.

https://en.wikipedia.org/wiki/Olympus_scandal

I reckon, the same applies to Korean Lotte, IMO

http://www.shanghaidaily.com/article/art...?id=330562
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#22
Was the Japanese Olympus scandal due to peer pressure? Were those involved, receive any benefits from the act? How they did with the benefits? The answers will determine whether a case of greed, or peer pressure, IMO.

https://en.wikipedia.org/wiki/Olympus_scandal

I reckon, the same applies to Korean Lotte, IMO

http://www.shanghaidaily.com/article/art...?id=330562
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#23
Watch the video

Elizabeth Warren's epic takedown of Wells Fargo CEO
http://money.cnn.com/2016/09/20/investin...index.html
You can find more of my postings in http://investideas.net/forum/
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#23
Watch the video

Elizabeth Warren's epic takedown of Wells Fargo CEO
http://money.cnn.com/2016/09/20/investin...index.html
You can find more of my postings in http://investideas.net/forum/
Reply
#24
Elizabeth Warren's take on this scandal is powerful, and resonated with me personally as a long time liberal.

That said, putting things into perspective, I feel that there is an over-reaction in general.

Net Financial Impact:
http://www.bloomberg.com/news/articles/2...50-million

Fees collected illegally from customers: $2.6 million (2 million illegal accounts created, net damage is $1.3 per account)
Fees to be reimbursed to affected customers: less than $50 million (worst case scenario, taking into account affected credit rating etc.)
Fines paid: $185 million  

Note that WFC's annualized income is about $20 billion.

The illegal fees over 5 years accounted for 0.013% of their 1 year profit.
Total material financial impact: (50+185)/20,000*100% = 1.2% of their annual net profit.

This scandal seems like a blip in history.

Personally, even in Singapore, I have experienced aggressive sales tactic for credit cards I don't need, so this is actually far from uncommon. I believe some of the perpetrators would have thought it is a victim-less crime as we can cancel the card any time. Of course this is not an excuse, and I am glad this is exposed for regulators to be more vigilant.

(Vested, non-core)
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#24
Elizabeth Warren's take on this scandal is powerful, and resonated with me personally as a long time liberal.

That said, putting things into perspective, I feel that there is an over-reaction in general.

Net Financial Impact:
http://www.bloomberg.com/news/articles/2...50-million

Fees collected illegally from customers: $2.6 million (2 million illegal accounts created, net damage is $1.3 per account)
Fees to be reimbursed to affected customers: less than $50 million (worst case scenario, taking into account affected credit rating etc.)
Fines paid: $185 million  

Note that WFC's annualized income is about $20 billion.

The illegal fees over 5 years accounted for 0.013% of their 1 year profit.
Total material financial impact: (50+185)/20,000*100% = 1.2% of their annual net profit.

This scandal seems like a blip in history.

Personally, even in Singapore, I have experienced aggressive sales tactic for credit cards I don't need, so this is actually far from uncommon. I believe some of the perpetrators would have thought it is a victim-less crime as we can cancel the card any time. Of course this is not an excuse, and I am glad this is exposed for regulators to be more vigilant.

(Vested, non-core)
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#25
don't think its okay to commit fraud even though it's only 1.2% of their annual net profits?

I shudder to think what other "deals" are on-going.... in the best interests of themselves...

why not self-deduct 1cts from all their registered bank accounts listed? it's only 1cts mah... anyone can afford to lose it... Tongue
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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#25
don't think its okay to commit fraud even though it's only 1.2% of their annual net profits?

I shudder to think what other "deals" are on-going.... in the best interests of themselves...

why not self-deduct 1cts from all their registered bank accounts listed? it's only 1cts mah... anyone can afford to lose it... Tongue
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
Reply
#26
i dont think this is an insignificant event but i dont get why many people are many such a big fuss out of it.

Insurance companies used to have agents who try to churn their clients cpf investment account. But we dont really condemn a specific company or the whole industry.

Some property agents have so many tricks up their sleeves to close a sale but have we linked them to their companies for being unethical?

Keppel Corp and Sembcorp Marine are facing allegations that US$9.5 million (S$13 million) in bribes were paid by agents of the two Singapore companies but even if this is eventually proven true, can we say that this is the culture of the entire company?

People should do some reading up on the Salad Oil Scandal of American Express. It would have been easy to say that the culture of the company is terrible , negative, etc. But it turned out to be one of Buffett's best investment ideas.

i guess most people can understand that there will be black sheep in every industry every company. If you have a personal and bad experience, then it wont be pleasant. Otherwise, life goes on, this is certainly an unpleasant event in the bank's history. Some other unpleasant events will definitely happen in the future, but whether you reject wells fargo as an investment idea just because of this reason, well, that's for you to decide
Reply
#26
i dont think this is an insignificant event but i dont get why many people are many such a big fuss out of it.

Insurance companies used to have agents who try to churn their clients cpf investment account. But we dont really condemn a specific company or the whole industry.

Some property agents have so many tricks up their sleeves to close a sale but have we linked them to their companies for being unethical?

Keppel Corp and Sembcorp Marine are facing allegations that US$9.5 million (S$13 million) in bribes were paid by agents of the two Singapore companies but even if this is eventually proven true, can we say that this is the culture of the entire company?

People should do some reading up on the Salad Oil Scandal of American Express. It would have been easy to say that the culture of the company is terrible , negative, etc. But it turned out to be one of Buffett's best investment ideas.

i guess most people can understand that there will be black sheep in every industry every company. If you have a personal and bad experience, then it wont be pleasant. Otherwise, life goes on, this is certainly an unpleasant event in the bank's history. Some other unpleasant events will definitely happen in the future, but whether you reject wells fargo as an investment idea just because of this reason, well, that's for you to decide
Reply
#27
(21-09-2016, 12:54 PM)Behappyalways Wrote: Watch the video

Elizabeth Warren's epic takedown of Wells Fargo CEO
http://money.cnn.com/2016/09/20/investin...index.html

In an election year, these politicians are looking out for scapegoats to look like heroes to the dumb public.

Look at the storm valeant and mylan endured too.
6 months from now, most people wouldn't even remember this "scandal"
It's not good for the company, but to put things in context, it's really miniscule.
Reply
#27
(21-09-2016, 12:54 PM)Behappyalways Wrote: Watch the video

Elizabeth Warren's epic takedown of Wells Fargo CEO
http://money.cnn.com/2016/09/20/investin...index.html

In an election year, these politicians are looking out for scapegoats to look like heroes to the dumb public.

Look at the storm valeant and mylan endured too.
6 months from now, most people wouldn't even remember this "scandal"
It's not good for the company, but to put things in context, it's really miniscule.
Reply
#28
I saw "extraordinary" from the actions... Big Grin

How about you?

Wells Fargo launches investigation into retail banking sales practices

Wells Fargo & Co <WFC.N> said on Tuesday that Chief Executive John Stumpf will forfeit unvested equity awards worth about $41 million and will not get a salary during an independent investigation into the bank's sales practices.

Former retail banking head Carrie Tolstedt has left the company, will get no severance and has forfeited unvested equity awards worth about $19 million, the bank said.

Stumpf and Tolstedt will also not receive bonuses for 2016.
...
http://www.todayonline.com/business/well...-practices
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#28
I saw "extraordinary" from the actions... Big Grin

How about you?

Wells Fargo launches investigation into retail banking sales practices

Wells Fargo & Co <WFC.N> said on Tuesday that Chief Executive John Stumpf will forfeit unvested equity awards worth about $41 million and will not get a salary during an independent investigation into the bank's sales practices.

Former retail banking head Carrie Tolstedt has left the company, will get no severance and has forfeited unvested equity awards worth about $19 million, the bank said.

Stumpf and Tolstedt will also not receive bonuses for 2016.
...
http://www.todayonline.com/business/well...-practices
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#29
Let's do an example.

Industry practise is $100K only. CEO set a target you must achieve $800K sales else no bonus.
You become desperate and do illegal stuff because the system allows you. All level of management know is impossible to achieve for most.

CEO says I am CLEAN. I did not ask them to eat s h i t. ( CEO want to hit my own performance target )
Make sense to you ?

Cory

Just my Diary
corylogics.blogspot.com/


Reply
#29
Let's do an example.

Industry practise is $100K only. CEO set a target you must achieve $800K sales else no bonus.
You become desperate and do illegal stuff because the system allows you. All level of management know is impossible to achieve for most.

CEO says I am CLEAN. I did not ask them to eat s h i t. ( CEO want to hit my own performance target )
Make sense to you ?

Cory

Just my Diary
corylogics.blogspot.com/


Reply
#30
(28-09-2016, 01:11 PM)corydorus Wrote: Let's do an example.

Industry practise is $100K only. CEO set a target you must achieve $800K sales else no bonus.
You become desperate and do illegal stuff because the system allows you. All level of management know is impossible to achieve for most.

CEO says I am CLEAN. I did not ask them to eat s h i t. ( CEO want to hit my own performance target )
Make sense to you ?

Cory

Fully agree. Performance based compensation (especially with very challenging KPIs) always has to be backed by strong reporting procedures and internal controls. The current revelations that the bank might have undermined their own internal control systems by terminating whistle blowers and staff reporting ethics violations is serious if found to be true.
Reply
#30
(28-09-2016, 01:11 PM)corydorus Wrote: Let's do an example.

Industry practise is $100K only. CEO set a target you must achieve $800K sales else no bonus.
You become desperate and do illegal stuff because the system allows you. All level of management know is impossible to achieve for most.

CEO says I am CLEAN. I did not ask them to eat s h i t. ( CEO want to hit my own performance target )
Make sense to you ?

Cory

Fully agree. Performance based compensation (especially with very challenging KPIs) always has to be backed by strong reporting procedures and internal controls. The current revelations that the bank might have undermined their own internal control systems by terminating whistle blowers and staff reporting ethics violations is serious if found to be true.
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