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Wells Fargo Scandal: Bureaucratic approach or is there any loop hole in Oxley Act.

Wells Fargo, Oxley act, Stumpf, accounting frauds, fraud, account scandal, scandal, Wells fargo scandal

After confirming the fake account scandal, CEO of well reputed US bank step down not only
from board membership but also chairmanship. Did entire US banking jolt down appear because of not
developing and devising the robust check and balance system, or there is still loopholes in current due
diligence procedures, even after the Oxley act that was the outcome of blatant Enron Scandal?
Who Was Behind The Scene
Stumpf was serving the bank from 2007 and are well known because of his attitudes, business
style, and industry experience. He backed with 27 years long tenure but now resigned immediately.
Despite, his strange outcast from industry. Analyst and critical observers seem very reluctant to accept his
resignation as a formal procedure because it has happened after the gigantic penalty of $185 by the US
regulators on Wells Fargo.
The shocking aspect of the whole scandal is that it seems obvious resemblance of Enron scandal
where officials used their authorities to do some questionable activities in company’s account and if
Wells Fargo scandal analyzed, so it also seems about using authorities but in a bad way.
So, if social engineering tactics are so common and still effective, it means that there is no any
need of audit and due diligence.
A well-known US authority ‘The Consumer Financial Protection Bureau’ disclosed that there
were two million or even more accounts have already been identified that were illegally opened without

any customer consents and almost more than five thousand employees had to leave their jobs, as consequence of their probable involvement in this horrible fraud.
Who is Responsible
But, are employees solely responsible for that activities? While they have to face immense
pressures to meet sales targets and urges to boost upselling by using different tactics; hence, in this
situation firing up under-pressured employees and giving up the safe passage to CEO seems strange and
The depiction of bureaucratic dictatorship in the so-called civilized Society.
It should be noted that “The Sarbanes-Oxley Act of 2002 (SOX) is an act passed by U.S.
Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by
corporations. The SOX Act mandated strict reforms to improve financial disclosures from corporations
and prevent accounting fraud.” Therefore, if SOX is so potent potion to curb accounting frauds so why
this panacea failed in Wells Fargo? Or Stumpf has some secret Frankenstein type formula to make due
diligence fail?
A Group Work?
It seems this widespread Wells Fargo scandal is the product of group work and sheer resemblance
of white color crime. Senator Warren (former CFPB head) posed several concerns about the scandal,
Stumpf role and his resignation in that regards.
However, there is a twist in the story! According to the source, “While I have been deeply
committed and focused on managing the Company through this period, I have decided it is best for the Company that I step aside. I know no better individual to lead this company forward than Tim Sloan”. So,
did Tim Solan is elected as replacement of Stumpf who was under the former CEO as chief operating
office, is it mean that to bury the whole case inside the dossiers, Solan is given this post as an urgent
project?

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