Tuesday, September 20, 2016

BAD REPORTING ON THE WELLS FARGO BANK SCAM?


This is an example of news reporting that, in my opinion (remember, that's what you're entitled to!) doesn't tell the complete story. And not telling the complete story leaves a news consumer like me without some important information.

Wells Fargo, one of the top three financial institutions in the USA, was found to have cheated it's customers by setting up accounts for them without the customers knowledge, and assessing fees for these accounts. 

The big story is that, not only did Wells Fargo get caught, but that they were fined a total of $185 million, including a $100 million penalty by the Consumer Financial Protection Bureau. This is the largest penalty imposed by the Bureau in it's 6 year history.

Wow! That's a big story, and that's a big fine! 

Unfortunately, here is the information that the news media, including NPR and the NY Times (from the reports I heard and read) leaves out.  

In 2015, Wells Fargo had a profit of 22.89 billion dollars. That's $22,890,000,000. Profit. 
In 2015, the Wells Fargo CEO compensation package was 19.3 million dollars. That's $19,300.000.

A fine of 185 million dollars ($185,000,000) is 0.78% of the 2015 profit made by Wells Fargo; that's less than 1 percent.

A fine of 185 million dollars is 9.3 years of the 2015 compensation of the Wells Fargo CEO; however, during the years that this consumer scam was going on in his company, the personal stock holdings in the company held by CEO John Stumpf increased by over $200 million!

So what do you think; is a fine of $185 million painful for Wells Fargo, or a footnote on their balance sheet? And as for the CEO, should he continue to have his job, and make over $9 million a year, and retain the value of the Wells Fargo stock he holds? 

This is the context missing from the news stories about the Wells Fargo fraud, and I think it is bad journalism.

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