Re:Backpage Raided, CEO Arrested on Sex-Trafficking Charges
by rayiner on Friday October 07, 2016 @06:17AM
(#12659479)
Senator Warren is really good at generating sound bites for people who have no idea about how companies work but are abstractly mad at them. The idea that WF would engage in systematic fraud to goose revenue by about $2.4 million is absurd (or add a bunch of accounts generating only that much in revenue--as if Wall Street analysts won't compute revenue per account).
Re:Backpage Raided, CEO Arrested on Sex-Trafficking Charges
by GVIrish on Friday October 07, 2016 @11:01AM
(#12661173)
Wells Fargo was touting its new account metrics to investors in addition to the typical revenue numbers. The idea being that if Wells Fargo is gaining that many new customers and new accounts, it would lead to a lot more revenue in the future.
Wells Fargo pushed its employees so hard to open accounts because there was a benefit to doing so.
Re:Backpage Raided, CEO Arrested on Sex-Trafficking Charges
by ceejayoz on Friday October 07, 2016 @09:17AM
(#12660388)
Revenue growth isn't the only important metric here.
They created two million new accounts, letting them go to the market and tout demand for their banking services.
Re:Backpage Raided, CEO Arrested on Sex-Trafficking Charges
by dx034 on Friday October 07, 2016 @10:43AM
(#12661020)
Having more accounts isn't automatically a good sign for the stock market. It's too easy for a bank to get accounts, you just offer people a sign-up bonus. The number of clients alone will usually not inflate the stock price.
Re:Backpage Raided, CEO Arrested on Sex-Trafficking Charges
by brbsix on Friday October 07, 2016 @05:18AM
(#12659220)
That was my first thought, even before I heard what Warren had to say. IIRC, Lending Tree was doing something similar. People associated with the company were opening accounts with which to borrow or lend money in order to juice the books and report increased earnings.
http://www.bloomberg.com/news/features/2016-08-18/how-lendin...
Actually, in the hearing Senator Warren tried to connect the fraudulent accounts to the stock price, which would have been a direct benefit for the bank:
> You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket. And when it all blew up, you kept your job, you kept your multimillion-dollar bonuses and you went on television to blame thousands of $12-an-hour employees.
http://www.nytimes.com/2016/09/23/business/wells-fargo-tests...