Wells Fargo Fraud Case – materials can be retrieved from:
https://ethicsunwrapped.utexas.edu/video/wells-fargo-fraud
Directions
Please read the case study, watch the two videos and answer the following questions.
Questions:
1. In what ways does this case study demonstrate conflict of interest? Explain.
2. In what ways does this case study demonstrate incentive gaming? Explain.
3. Although Wells Fargo attempted to curb fraudulent activity with an ethics workshop and change in compensation structure, the company continued to find fraudulent accounts being opened by employees. Why do you think this continued to occur? What do you think Wells Fargo could have done to better curb fraudulent activity?
4. Many employees admitted that they knew what they were doing was wrong but continued to open fraudulent accounts. Do you think their actions were in any way ethically justifiable? Why or why not? If you were in their position, what would you have done?
5. In response to the Wells Fargo case, U.S. Treasury Secretary Jacob Lew stated, “This ought to be a moment when people stop and remember how dangerous the system is when you don’t have the proper protections in place.” He added, “This is a wake-up call. It should remind all of us and firms that culture and compensation make a difference,” continuing, “How you reward people, how you motivate people and what values you hold people to matter.” Do you agree with Lew? Why or why not? How would you suggest companies protect against such “dangerous” systems?
