Wells Fargo and its Enablers are Whining

New Orleans     News reports, partially attributable to banking giant, Wells Fargo, indicate that they are about to face an additional fine of $1 billion dollars from a variety of governmental agencies including the largely de-fanged Consumer Financial Protection Bureau for their high crimes and misdeeds.  As everyone should be ceaselessly reminded in the case of this criminal enterprise, they were found to have opened accounts without permission for consumers and in other cases, jacked up interest rates for different consumers on auto loans, and a handful of other practices called mildly “customer abuse,” but really plain stealing from their customers.  This one billion is on top of more than four billion that they have also been fined by the Federal Reserve in addition to a public slap down administered by Janet Yellin, former head of the Federal Reserve, as she dropped the microphone in one of her final acts before surrendering the post to Trump’s appointed successor.

In my view Wells Fargo has long been a criminal and near criminal conspiracy that has permanently damaged countless neighborhoods and millions of families.  All of these penalties are past due recognition of the outrageous, litigate and coverup, money first before all things culture that has characterized the bank for years.  The fact that none of the executives were criminally charged is a testament to the coziness of class in America and the huge corporate legal shield built around banks and other businesses.  Real regulators would have seized the bank, taken away their charter, put them on permanent supervision, or any number of other steps that would have forced change rather than allowing them to pay some and charge off the rest of these billions of dollars’ worth of fines on their books and taxes.

Amazingly, a columnist in the New York Times, James Stewart, has summoned a bunch of business school professors for statements that maybe Wells Fargo has been “punished too much.”  He mentions that no executive was criminally charged.  I would have been all for that as well, but they were shielded by the corporation itself.  Liability exists for the corporation when the practices are systemic, which is why it is just that the corporation be fined for its front-to-back rip-off culture.

Stewart, with the professors, tries to plead for the poor shareholders, mainly big timers and institutions which dominate all of these markets, as being the ones punished.  Incredible!  Where were the shareholders, as they rubber stamped board and management practices annually while all of this abuse was happening?  Did the shareholders demand board changes and board resignations?  No, that was the Federal Reserve, not the shareholders.

Stewart and other bank apologists want to argue that the bank is taking great steps to change.  Another billion dollars fine seems like a good way to make them move even faster and more forcefully to change their culture.  Maybe even permanently.

The shareholders looked the other way when Wells Fargo was padding its books with these practices and enjoyed the good times.  There’s some justice in the shareholders having to also pay a price for the bank’s grand larceny in these times.

The business school professors might want to take some of the ethics classes at their colleges.  They can invite Stewart to audit those classes as well.

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Corporate Impunity, Shareholder Farce

062314-nabors-industries-ignores-shareholder-votes-cartoonNew Orleans   I love these big, fat whoopers that the big corporate whoops stand and piously tell about working for their little shareholders, pensioners, and old ladies in Des Moines, especially because it is crystal clear that if they don’t treat these publicly owned companies as private preserves, they are only accountable to the big hedge funds and institutional investors. This is the season when they start rolling out their annual reports on performance over the last fiscal year and pretending that there is some kind of shareholder “democracy.” What a hoot!

It’s the season when shareholders get to try to vote and be heard. An interesting article the other day went through the list of some of big companies where CEOs and directors routinely ignore the votes of the stockholders. Not surprisingly Oracle, the computer and software company, was listed as a prime example where its CEO and big shareholder, Larry Ellison, always among the ten richest billionaires in the world, and often a leading figure on any lists of overpaid executives, is the big dog. Shareholders there have voted multiple times against the compensation program and the inflated pay packages, but their votes are ignored so the good times can roll.

The myth is more important than the reality when Wall Street pretends they are accountable to shareholders. It’s another example of democratic farce before tragedy. Meanwhile conservatives wonder why “little” shareholders have left the market. In some ways the answer is simple: casinos have now created more gambling options closer to home than Wall Street.

Not that they really care.

Simple things like a company’s annual reports, a rare piece of business journalism requiring special skills for the initiated to plow through the numbers hidden in the marketing and promotion, is no longer required to be sent to individual holders. Instead they get a notice that tells them that the report is done and the annual meeting is coming, but if they really, really want a copy, they can go on a website and see if they can request one, and just maybe it will be sent along. I bet we can almost count on one hand the number of people who will go to the trouble. Meanwhile, they want the shareholder to vote for their slate of directors and follow the directors’ instructions on other ballot issues.

Actually Vegas probably does a better job at regulating gambling than the SEC does. In Vegas it’s important for the punter to believe that there is a fair deal and that the game is not fixed by the house. With computer trading, Wall Street machinations, and kid glove regulation by the SEC, no one will ever pretend that Mom and Pop little shareholders with a couple of shares of stock where they used to work isn’t playing in a rigged game that always favors the big houses.

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