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The bankers have donated plenty of money to Obama and the democrats, they have no worry about being prosecuted, hell Wells Fargo was handed some sweetheart deals from both Obama and Bush's administration during the whole meltdown where they were buying up smaller banks for pennies on the dollar with tax payer money given to them by both administrations. Why would anybody think the government would do anything to them over a few new accounts?
The government got their "taste" here. It's all they care about.
Wells Fargo revenue is around 15billion-ish and the fraud was about 5 million.
So, the fraud added maybe 1/3000th.
Impact on stock price would be negligible, it's really not a debatable point like which pizza is best or coke vs. pepsi...it's straight math.
It's not too hard to figure out what occurred here.
1. Bank pressured employees with production goals.
2. Some relatively small amount of cheating occurred which the company apparently tried to cover up because it would be bad press.
3. They got caught.
As a consumer there is plenty to be upset about...the pressure sales, the fraud, the cover-up....take your pick....but the fraud itself was more of a symptom than a plan to make more money with fraud because the amounts were immaterial financially.
Although the number of employees is significant even though it's a small amount of their business, it's not as simple as a math equation. They constantly touted their new accounts in earnings calls and gave the perception they were a well managed company. If this can happen you have to wonder what else went under the radar, certainly doesn't amount to good management. This is exactly what happened in 2008, none of these banks had the slightest idea what was going on, has anything changed.
Although the number of employees is significant even though it's a small amount of their business, it's not as simple as a math equation. They constantly touted their new accounts in earnings calls and gave the perception they were a well managed company. If this can happen you have to wonder what else went under the radar, certainly doesn't amount to good management. This is exactly what happened in 2008, none of these banks had the slightest idea what was going on, has anything changed.
The new accounts were mostly real with some fraud due to the pressure they were putting on their employees and then turning a blind eye to whistleblowers.
THis is a common repercussion of pressuring sales in ANY industry. Employees start lying to customers, faking sales and otherwise gaming the system.
Heck, this is a cultural phenomenon and is featured in many TV shows and movies. (Hint: Michael Keaton movie about making cars with Japanese bosses?)
P.S. It's not as simple as a math equation? Um....what do you think those analysts are doing...nodding their heads at rhetoric? Do you know what they do for a living? It's MATH and EQUATIONS.
Obvious I hit a.soft spot or your entire post would not be about me.
You still haven't answered questions about your inability to follow financial calculations and why you can't address facts.
I'm trying to point out how the this sort of fraud happens and your rebuttal seems to be I'm defending Wells Fargo by pointing out the money trail of their fraud?
Without looking, how many people here off the top of their head know the stock price formula built off the standard perpetuity formula?
What about Black-Scholes? Without looking anyone here able to tell me what that is? No...it's not a new sitcom....
All you are saying is that you have a financial interest in trying to deflect the corruption that is Wall Street. Formula's have nothing to do with corruption. Entire stock bubbles have been built lately on corruption. The tech and housing bubbles were nothing but completely corrupt. Worthless items being pushed off as valuable.
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