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Wells Fargo's woes continue — rotten culture continues to stink Volkov Law Group

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It’s hard to write yet another post about Wells Fargo cheating. Wells Fargo’s troubles continue unabated. I’m not exaggerating—I promise. Every few months we hear about another issue, another enforcement action, another exposure of wrongdoing. I’m not going to tell you all the horrifying history of Wells Fargo. We all know it, and like rotten fish, we can all smell it.

Before I summarize Wells Fargo’s latest issue, let me suggest the so-called “root cause.” When Wells Fargo’s sales incentive fiasco and trouble stemming from customer fraud first became known, many inside Wells Fargo, including the CEO and various board members, began to criticize themselves. and then tried to pass the blame on to others.

This attitude is pervasive, and Wells Fargo’s senior management and board issues led to the dismissal of the CEO, the dismissal of senior management, and the replacement of board members, revealing the full extent of the problem. It wasn’t until For some reason, I don’t think Wells Fargo tried to change the basic management culture. A surgical strike was carried out when a massive top-to-bottom transformation was warranted. Whatever attempts were made to rectify the problems at Wells Fargo, the effort was lacking and no real commitment to change seems to have really taken place. , there was no change in company attitude, culture or performance.

In this context, let’s turn to the latest fiasco.

The U.S. Department of Justice and other agencies are investigating misconduct in Wells Fargo’s diversity recruitment program. In an earlier class action lawsuit filed in California, some bankers claimed they fake interviewed potential candidates to meet their diversity interview quotas.

Wells Fargo needed to show a complete lack of commitment to diversity initiatives. The class action lawsuit requires bank management to set up fake interviews of qualified candidates as “diverse” candidates so that at least half of all candidates interviewed come from underrepresented groups. It claims to comply with Wells Fargo’s requirements.

In response, federal law enforcement agencies launched an investigation. Rep. Maxine Waters, chairman of the House Financial Services Committee, has called on the Federal Reserve and the Consumer Financial Protection Agency to launch their own investigations.

The Federal Attorney’s Office in Manhattan has opened a criminal investigation. The Department’s Civil Rights Division is investigating.

Wells Fargo announced its first diversity initiative and interview program in 2020. Wells Fargo’s effort was intended to further the allegation that it considered diverse management candidates but was intended to avoid increasing the actual number of diverse employees. Deceptive practices are designed to meet regulatory expectations in the event of an audit.

The former banker is reported to have indicated that wealth management department supervisors directed black and female candidates to be interviewed for positions that had already been filled by another candidate.

Rather than acknowledging or accepting the potential problem, Wells Fargo seeks to reduce the allegations by claiming the practice is “anecdotal” rather than “pervasive.”