identify an example of an organization that has committed fraud. What happened and what were the...

identify an example of an organization that has committed fraud. What happened and what were the legal ramifications?

Expert Solution

An example of an organisation that committed fraud - Wells Fargo 2016 case.

Wells Fargo was charged with fraud when millions of checking accounts were created without the knowledge of the customer. Also debit cards, credit cards, lines of credit were issued without the permission of the client. This came to the notice of various law enforcement agencies when customers started complaining that they have had to pay interest charges, have cards, loans in their name without their consent. Reports blamed the branch employees, managers that they sold products without prior permission as the incentive plans were structured in such a way that maximum number of solutions provided earned the maximum amount of incentives. Once the entire case came to the forefront, Wells Fargo was charged with a fine of $ 185 million. The then CEO John Stumpf also resigned. It was later known that employees were pressurised to sell multiple solutions to clients and also posed the risk of loosing jobs due to underperformance. Various employees involved in this kind of unethical selling also lost their jobs. This kind of fraud tarnished the reputation of the bank and the management made reforms in their policies to gain back the trust of clients.

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Identify how ethics and fraud issuesreflect on an organization

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