Bankers have a justifiably awful reputation, particularly after the financial crisis. Although they completely raped the country, the general meme afterward was, “Yeah, gee, they got away with it, but we’ve learned our lesson as a society. Now we have the laws in place to harshly punish misbehavior on the part of bankers, and if they do anything naughty again, we’re going to throw the book at them. So………..sorry, society, but we’ve got your back now. Honest.”
Thus the Dodd-Frank law was seen as the “make good” for humanity letting Lloyd Blankfein, Jamie Dimon, and all the rest of them not be strung up by their necks in 2008.
We got our first test of this recently when Carrie Tolstedt, whose 102,000 “team members” (ummm – clerks) were directed to execute one of the most massive frauds in financial history, was caught red-handed. Carrie was one of those featured in the “most powerful women in banking” cover stories that American Banker does regularly.
As a side note, I find the devotion on an article devoted to a particular gender in an industry just weird. No one else does this, do they? Does the AMA have a “Best Black Doctors in America” feature? I know the ABA is probably doing this to pat itself on the back for giving opportunities to women, but I think featuring any group based on its ethnicity, gender, sexual preference, or anything else, is wrong-headed. But I digress.
Anyhoo, Ms. Tolstedt banked about $125,000,000 for her misdeeds at WFC, so what’s her punishment? A complete forfeiture of all her assets? Prison time? Public execution? Nope. She got a nice press release from the bank and is going to leave without paying a penalty (her employer, however, will pay almost $200 million in fines……….oh, and about 5,300 ordinary employees are going to get shit-canned, because, ya know, what they did was wrong and everything).
I don’t suspect Carrie is being kept awake at night by all this (although, if I were her, I’d be watching my back – – this is getting a lot of press). All the same, I suspect Wells Fargo’s formerly clean reputation has been permanently sullied, much in the same way that Volkswagen, formerly associated as a groovy company that made cute VW bugs from the 1960s and Ken Kesey-style vans, was likewise nailed as a lying, scummy enterprise that finally got caught.