Recent news has been full of a recent financial scandal uncovered at Wells Fargo Bank. On Sept 15, an opinion piece by Susan Ochs (2016) that analyzes this issue was published in the New York Times. As we can see in the title of her article, Ms. Ochs’ primary assertion is that while thousands of Wells Fargo employees were held accountable for the scandal, this accountability did not reach high enough. She explicitly calls out the lack of action taken against Carrie Tolstedt who was Senior Vice President for Community Banking, the division in which the scandal occurred.
It would seem that Ms. Ochs is starting with the assumption that most readers are already aware of the scandal as she gives very little detail. She does, however, explain the basics; that employees of the bank opened millions of unauthorized accounts in the names of real customers in order to meet high pressure sales quotas (2016). Ms. Ochs provides no other detail than that, but does also give some background into the repercussions so far. The bank has announced that it will eliminate sales goals for retail banking products, is paying restitution to customers who were charged for these unauthorized accounts, and has fired 5,300 employees and managers deemed to have participated (Ochs, 2016).

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Ms. Ochs then points out that Carrie Tolstedt has, apparently, not been held accountable. Indeed, Ms. Ochs suggest that Wells Fargo has taken pains to protect Ms. Tolstedt who announced her retirement on July 12th. According to Ochs, Tolstedt knew about the misconduct well in advance, was supposedly spearheading internal efforts at reform for as many as five years, and was allowed to step from her divisional role just weeks before a regulatory announcement was made and will remain employed until the end of the year when her retirement takes place. Furthermore, Tolstedt will leave with all of her stock awards, valued at about $125 million, fully intact (Ochs, 2016).

With these specifics in place, Ochs delved into the core of her argument, a criticism of corporate culture in the banking world. She suggests that this scenario is common in nearly every past banking scandals where senior executives are shielded from negative impact while lower and mid-level employees are left to face repercussions. She also suggests that while upper level executives are often far removed from isolated actions by subordinates, the Wells Fargo Scandal does not fit this mold. Firstly, the actions of thousands of employees involving two million fraudulent accounts certainly do not fit the idea of a few bad apples or an isolated incident. It does reveal a large, systemic, problem and these are the sorts of issues that senior executives are meant to address according to Ochs (2016).

Secondly, Ochs points to process of cross-selling that Wells Fargo has stated is the cornerstone of its retail business model. Complaints about this model are not new and cover the five-year period that Tolstedt oversaw the retail division. Furthermore, Ochs says that Tolstedt was made aware of problems as early as 2013 and that internal Wells Fargo controls detected fraudulent behavior. The result was supposed to be stronger training, monitoring, oversight, and a revamped compensation structure but it is still unclear how Tolstedt worked to implement this or why the behaviors persisted for so long (Ochs, 2016).

Ochs closes her arguments by suggesting that even after the major financial crisis of 2008, regulators still struggle to hold business leaders accountable. Organizations overall are often charged since it can be legally difficult to name specific individuals and prove that they played a direct role in the actions of their subordinates. While this can still lead to change of specific systems and processes, it makes it difficult to address issues of accountability and addressing problems of corporate culture that often promotes these sorts of actions. In order to fully address these problems, and prevent future ones, Ochs suggests that strict accountability and corporate change are what we need, however (2016).

I definitely appreciate that Ms. Ochs wrote this piece and think it is good that people are having these sorts of discussions more openly now. I applaud her candor and totally agree that the people in charge need to be held accountable and not just the workers following direction. At the same time, reading this leaves me with a bad feeling because I was a victim of fraud in the past so I cannot help but feel sympathy for the victims, but also anger that things like this can happen. It is especially troubling that it happened on such a large scale at a very major bank. I have friends and family who have accounts with Wells Fargo and they could very easily have been caught up in this mess along with the millions of others whose names were used.

I also find that this article provides a strong warning to me as a college student for whom these lower level service and sales jobs might be attractive. Furthermore, I will graduate in a few years and then be in a position to work in those entry level management positions. Both of these types of positions seem like they are the most vulnerable because they often have lower compensation, which means the drive to earn more money might make it easier to succumb to pressure to get into grey, or even illicit, practices. On top of that, these positions also have the least amount of power and influence so even if I encounter pressure to do things I do not agree with and want to resist, they could just fire me. The story told by Ms. Ochs is basically one where a large company was willing to get rid of 5,300 workers just to save one of the inner circle and preserve that top level corporate culture. This certainly tells me that I need to be very careful and research not only any bank I want to do business with specifically, but also any company I am considering working for no matter the field, but especially if I go into banking.

  • Ochs, S.M., (2016. Sept 15). In Wells Fargo scandal, the buck stopped well short. New York Times. Retrieved from: