Wells Fargo Fake Account Scandal

Wells Fargo Bank, based in San Francisco and one of the largest banks in the United States, if not the world, has been the subject of a long-standing fraud investigation. Subsequent investigations by the Los Angeles City Attorney, the Consumer Financial Protection Bureau, and the Office of the Comptroller of the Currency established a bank-wide pattern of cross-selling bank products to unassuming customers. This included opening unauthorized credit cards, unauthorized bank accounts, forging signatures, illegally transferring a client’s funds and extending mortgage loans without permission. Previously, the bank was sanctioned for its involvement in the notorious sub-prime loan scandal which led to the global recession of 2008–2010. Up to 1.5 million deposit accounts and half a million credit card accounts may have been involved. The bank subsequently paid millions of dollars in settlement fees and forced private litigants into arbitration rather than court. This case study follows a series of bank and corporate frauds where we highlight structural holes and contradictions in the capital markets. We further invoke William Chambliss on structural contradictions in the capital markets as a means of explaining corporate, white-collar crime.