Wells Fargo: controls?

You’ve probably read accounts of the fraud at Wells Fargo in connection with cross-selling.  Over 5,000 employees were involved over a span of 5 years!  Here’s a good account of the situation by Andrew Ross Sorkin as reported in the New York Times: http://p.nytimes.com/email/re?location=InCMR7g4BCJTYuyKqXu41lOnxEkBWiqW&user_id=6284346ca2298b52bdd18ccab28c3e1d&email_type=eta&task_id=1473770462575991&regi_id=0.

For you to ponder:

• How could the gap between Mr. Stumpf’s words and the actions of his employees have developed and persisted?
• What controls might have prevented the activity or at least detected it in the very early stages?
• What does the massive scale and duration of the fraud suggest about risk management at Wells Fargo?
• How did the illicit activity escape the notice of both the internal and external auditors?
• Finally, how did it go undetected by bank regulators?

Accountability also seems to be absent from the Wells Fargo culture judging by the fact that the executive in charge of the the area of the bank in question decided to “retire” and will leave with a bonus of $124.6 million.