Matt Levine just shows that Wells Fargo wanted a paper trail showing that they told employees not to do this. The interesting question is, what happened when whistleblowers told them it was happening anyway? Apparently, the answer is that they fired the whistleblowers. That says everything about what Wells Fargo really wanted, as opposed to what they said to cover their asses. Remember, he's an industry insider with a bias.

Explain what exactly Wells Fargo upper management had to gain from the fake cards? They wouldn't generate real money for the company. The people who stand to benefit most are the individual employees.

I don't know the banking industry well so maybe there is some way for the company to make money off fake cards but I can't think of one. And because of that, I tend to believe that upper management really did not intend it to happen.

If you own stock in the company and this causes the stock to go up (even if the rise is artificially inflated) you can still make plenty of money.

Yeah but what about fake accounts would make the stock go up? Wouldn't it actually make the revenue per account go down which would seem to me to be negative indicator. But again, I don't know the banking industry.

Their stock price was heavily based on their high cross-selling metrics.

It's a short term bonus ploy, and the idea is it doesn't get found out while they're at the company Also a lot of head-in-the-sand doublethink too. Michael Lewis' book, and other in-depth reports about bankers' behaviour in the market / housing crash explains it nicely. Short term incentives for executives and moving jobs means that they aren't there when the chips are down.

Growth metrics

> The people who stand to benefit most are the individual employees.

And their managers, and their managers' managers, whose income depends on showing good numbers to the nth-managers.

> Apparently, the answer is that they fired the whistleblowers.

That's the major sin here.

I'm shocked - shocked! - to find that gambling is going on here!

For those that don't get the above reference https://www.youtube.com/watch?v=nM_A4Skusro

> The interesting question is, what happened when whistleblowers told them it was happening anyway? Apparently, the answer is that they fired the whistleblowers. That says everything about what Wells Fargo really wanted

It says everything about what the people in the loop of those decisions wanted, perhaps, but those people (at least, those for whom there is a known paper trail of them being in the loop) are probably several steps removed from the CEO. They also probably also maintained enough of a paper trail of the notional reasons that they were firing the people involved that, while its a reasonable inference from the association between whistleblowing and firing that there was an ulterior motive, it would be far from certain that that could be established to the degree necessary for that to the basis of criminal culpability.

This ignores that top management is also paid in large part with company stock and in the 5 years prior to this being discovered the stock doubled. One of the metrics that had investors excited was the increasing number of accounts which was publicly reported.

I would have an easier time believing this if the company had not retaliated against people who tried to complain internally.

They fired thousands of people for creating accounts without permission. It's hard to say they looked the other way.

It doesn't seem possible that 5000(!) employees did this and the CEO had not a clue.

Maybe they should have figured out that their incentive structures were wrong when they had to fire 5000 people over several years. But the very act of firing thousands of people shows that they were discouraging it, strongly.

Did you know that there's a reality tv show based on this premise?

Of course it is. In a company that size where employees work all across the country it's actually very hard for the CEO to find out about sth like this.

He can only create structures (e.g. internal audit team) that are powerful enough to detect it and report it to him.

There's still a duty of vigilance.

And IANAL but that's a tort, not a crime.

"Give a manager a numerical target & he will hit it, even if it means destroying the company to do so."