Case Study 10: The Wells Fargo Scandal: A Tale of a Toxic Corporate Culture
Written by Tara Radin and Dahlia Rehg
Case Summary
Wells Fargo, admired for how it emerged from the financial crisis of 2007-2008, has more
recently been exposed for illegal conduct by employees dating back to 2002. In September
2016, it was announced that Wells Fargo was being fined $185 million for fraud. An
investigation revealed improper actions including but not limited to employees having applied
Case Analysis
to the human persons that populate them, i.e., the talented employees who breathe life into their
Critical Thinking Questions and Suggested Answers
1. How did fraud continue for more than 10 years at Wells Fargo?
It is easy to be critical in hindsight; it is important to recognize that the behavior likely
2. Why did it take so long for Wells Fargo to get caught?
There is no single reason, but many that combine to create a sort of perfect storm.
First, employees felt powerless. There were afraid of losing their jobs, either for
3. Did Wells Fargo respond properly in 2016 when the investigation exposed the
fraud? Is there anything else that the company could or should have done?
While answers will vary, there is significant evidence that suggests the initial response
by Wells Fargo was superficial and inadequate. At the very least, the fact that an
outsider was named to take over as CEO less than 3 years later strongly suggests the
4. What would you have done if you were a Wells Fargo employee feeling pressured
to participate in fraudulent acts?
Answers will vary. The goal of this question is for students to acknowledge the
5. What would you have done if you found out that a co-worker was participating in
fraudulent acts?
Answers will vary. Some students will likely say they will report their co-workers.
6.
Again, answers will vary. It is hoped that students will explore more significant