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Yesterday (October 11) Wells Fargo released a study concluding that many Americans are investing too conservatively for their retirement.

Today (October 12) Wells Fargo announced that its chief executive, John Stumpf, will retire, effective immediately. Stumpf took the heat, including before Congress, for the bank's strategy of putting so much pressure on employees to fatten profits that they invented phony credit cards and bank accounts. Stumpf will walk away with $123.6 million in severance and stock value, according to USA Today. Some other publications have different numbers, but all agree Stumpf will walk off with a bundle of money.

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SportsFan0000 Oct. 13, 2016 @ 12:32 a.m.

Same kind of crap that John Moores and Peregrine Systems did to pressure sales reps to inflate sales figures and juice the stock prices to phony highs for their "pump and dump" schemes. It is quite common in business to keep "moving the goal posts" continually raising the quotas for sales people and business development management constantly that implicitly encourages fraud..by employees or the alternatives are that they cannot make their quotas, cannot make their bonuses and commissions, cannot make a decent living since most of their income is designed to be commission and bonus based...It is a system that encourages rampant fraud..

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Don Bauder Oct. 13, 2016 @ 7:49 a.m.

SportsFan0000: Yes, there are similarities with Peregrine Systems, but there are stark differences, too. At Wells Fargo, mid-level employees were given such high sales goals, and pressured so much to produce, that they felt they had to create phony credit cards and bank accounts. So the actual commission of the fraud was pushed to lower level employees. Top management didn't have to say a word.

Peregrine's fraud was pulled off completely by top management and the board. Top officials did such things as making phony sales with other companies, keeping the books open long after a quarter was over to jack up sales, etc. The most repugnant aspect of the Peregrine swindle was that Moores and his board members got off the hook. All they had to do was make a payment. That's typical San Diego justice: don't touch the real villains, who are among the richest people in town. Best, Don Bauder

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hwstar Oct. 13, 2016 @ 7:59 a.m.

Stumpf would not void the binding arbitration clause in Wells Fargo consumer banking contracts for those customers who had the bogus accounts created. What does that tell you? Quite a bit. Binding arbitration allows companies to become bad actors, because they can't be held accountable for their transgressions in a court of law with a jury trial. Decisions by the arbitrator are final, non-appealable, and do not affect precedent. It's a good thing the Consumer Financial Protection Bureau is considering prohibiting the use of binding arbitration in consumer banking contracts. Let's hope the CFPB's anti-arbitration push is not overridden by Congress. There needs to be the threat of lawsuits in a court with a jury to keep companies honest.

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Don Bauder Oct. 13, 2016 @ 2:32 p.m.

hwstar: I agree. Binding arbitration clauses permit mischief by the corporation and often screw the customer. Banks, brokerages houses and other institutions use them and abuse them.

Incidentally, you may want to read a Reader column I did July 31, 2013, titled "Warning: Read the bank's fine print." This is about a dubious ripoff pulled off by Wells Fargo. Best, Don Bauder

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nostalgic Oct. 13, 2016 @ 8:26 a.m.

Why does the Federal Govt. think Wells Fargo is the only one? These ideas were not kept top secret in the banking community. .

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Flapper Oct. 13, 2016 @ 3:40 p.m.

CRUCIAL point! "These ideas were not kept top secret in the banking community." I seriously doubt that thousands of employees came up with the same idea simultaneously.

Oligarchy, monarchy--what's the essential difference?

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Don Bauder Oct. 13, 2016 @ 6:48 p.m.

Flapper: Creation of phony accounts was not invented by Wells Fargo. Best, Don Baudeer

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Don Bauder Oct. 13, 2016 @ 2:35 p.m.

nostalgic: I am sure the federal government knows that the big banks, in particular, use such strategies to squeeze every nickel out of the business to come up with profits each quarter that please Wall Street. Often, however, regulators will go after one company and others in the industry have to fall in line. Best, Don Bauder

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Flapper Oct. 13, 2016 @ 3:54 p.m.

FOREGO WELLS FARGO!

HOW FAR WILL WELLS FARGO GO?

A BLATANT FAR(RA)GO OF LIES!

ILLS FARGO

GO FAR, WELLS! FAR, FAR AWAY!

AUK! NAG A RAM!

(SUPERSTRIKE BUMPERSTICKERS)

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Don Bauder Oct. 13, 2016 @ 6:50 p.m.

Flapper: Wells Fargo was loved by Wall Street. It kept coming up with steady profits, quarter by quarter. Hmmm. Best, Don Bauder

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Flapper Oct. 13, 2016 @ 7:28 p.m.

What fraction of the profits were earned, and what fraction were not? Of the latter fraction, what fraction were the result of fraud and/or theft?

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Don Bauder Oct. 13, 2016 @ 8:56 p.m.

Flapper: Luckily for Wells Fargo, analysis of banks' profit and loss statements and balance sheets is not easy. Best, Don Bauder

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Flapper Oct. 13, 2016 @ 7:30 p.m.

How do the "fines" compare to the ill-gotten gains?

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Don Bauder Oct. 13, 2016 @ 8:58 p.m.

Flapper: Government fines to Wall Street crooks are a bit of a joke. The fines, after the bank accountants and tax preparers play games, have little significance. Best, Don Bauder

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AlexClarke Oct. 14, 2016 @ 6:46 a.m.

Of course Americans are hesitant to take risks with the piddly retirement funds. Most working folk can not afford to put aside the kind of money necessary to retire on. The 401k plans were never designed to be a be all end all retirement plan. When introduced they were to be part of the retirement plan. Part one was a defined benefit plan provided by the employer, part two was the 401k, and the third part was Social Security. Combined they provided a decent retirement. What happened is what always happens. Employers dumped their defined benefit plan and kept the 401k. Some provided a defined contribution plan. All of these plans relied on the average person to direct the investments. Many lost money when they invested aggressively, like Wells Fargo wants you to do, others discovered that the fees charged reduced their principle and many discovered that their defined contribution plan had less in it than they put in. With the high cost of living and the low wages in San Diego there is little chance that a worker will ever be able to retire. What we are investing in is future poverty. Who do you think will be supporting the Walmart workers when they are too old to work? The taxpayer will while the company reaps huge profit built on the backs of the workers.

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Don Bauder Oct. 14, 2016 @ 8:24 a.m.

AlexClarke: The private sector for the most part eliminated defined benefit plans. The public sector by and large did not. Result: huge pension deficits in American cities. Best, Don Bauder

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Flapper Oct. 14, 2016 @ 12:36 p.m.

"Many lost money when they invested aggressively, like Wells Fargo wants you to do, others discovered that the fees charged reduced their principle and many discovered that their defined contribution plan had less in it than they put in."

The principle is to get as much of your money as possible, even the principal. I don't know how much their principles can be reduced--they're lower than a snake in a wagon-rut already.

Punishment like that I could handle--a six-figure golden parachute studded with precious jewels.

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Don Bauder Oct. 14, 2016 @ 2:37 p.m.

Flapper: "Lower than a snake in a wagon rut." Never heard the expression. Good one. Congratulations. Best, Don Bauder

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Don Bauder Oct. 15, 2016 @ 7:55 a.m.

Flapper: You have Trumped me many times, even though my first name is Donald. Best, Don Bauder

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Don Bauder Oct. 15, 2016 @ 9:32 p.m.

Flapper: I have a sweatshirt with these words on the front: "The Don." When I wear it, invariably somebody cracks that he doesn't want me to take a baseball to his knees. With our loose gun laws, it's a bit of a surprise that somebody has not pulled out a pistol and put "The Don" away. Best, Don Bauder

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Don Bauder Oct. 16, 2016 @ 8:52 p.m.

Flapper: You wouldn't like to see me in a sweatshirt with the words "The Donald"? Best, Don Bauder

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Flapper Oct. 17, 2016 @ midnight

You just made me regurgitate. And expectorate.

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Don Bauder Oct. 17, 2016 @ 1:59 p.m.

Flapper: Regurgitating and expectorating at the same time would be a difficult feat. Best, Don Bauder

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