I know. I helped prosecute the executives at the center of Enron.
It was revealed last week that Wells Fargo, the second-largest bank in the country, has been caught in a craven money grab at the expense of its smallest retail customers in a scandal that recalls abuses of the 2008 financial crisis in terms of sheer audacity. Taking a page from the telecom companies that used to “slam” customers by changing their long-distance providers without notice or request, Wells Fargo’s salespeople opened millions of credit card and other accounts for individuals who did not ask for them, producing fees for the bank and inflicting credit damage on consumers.
It’s plain why this happened. The cause was a familiar two-step among the management of the massive corporations that dominate global banking and many other industries. Step one: Set aggressive sales and earnings targets, using employee compensation as the incentive to get there. Step two: Fail to monitor the salespeople (or traders, or engineers, or whomever might be on the front lines several levels down) who inevitably respond to the enormous financial and career pressures—and lax supervision—by crossing ethical and legal lines.