I called the Wells Fargo ethics line and was fired | Hacker News Reader

I called the Wells Fargo ethics line and was fired

money.cnn.com

47 pointsjflowers4517 comments

If you rock the boat, the system will find a way to retaliate against you, unless you find a way to remain anonymous.

Having a formal process for whistleblower reporting which protects the whistleblower looks good on paper, but in practice it seems that the concerns often go into a black hole and the paper protections aren't a practical shield against retaliation.

The takeaway? Be very paranoid; if you're thinking of being a whistleblower, you need to either find ways to raise your concerns anonymously, or be prepared for whatever powerful people you threaten to do their best to ruin your life. Which means either finding someone more powerful to protect you, or accepting that if you do the right thing, there will almost certainly be very serious consequences for you, but only a small chance of meaningful positive change.

If I ever personally was in a situation like this and decided I saw something that needed to be reported, I'd go the first route -- total anonymity. I deeply respect people like Snowden who choose martyrdom instead, but I like living a comfortable life too much to be willing to sacrifice it for my principles.

Ethics aside.

The problem is there's a name for someone like that scapegoat. You best course of self preserving, none martyrdom action is to leave the situation as fast as possible.

"The bank earlier this month paid $185 million in penalties and has since apologized."

Wells Fargo has a yearly revenue of $86b, so the $185m fine is like someone who makes $100k a year getting fined $215.

Revenue != Profit

I think that is still a valid comparison $100k income is a person's revenue, not their profit.

Your salary is revenue and not profit as well, the analogy is sound.

Not really. Any money you make above cost of living is effectively discretionary cash. And it doesn't cost money to get a raise. But with a business, it usually costs money to make money. As a trivial example, if you have a company with razor-thin margins, lets say 1% margin, then you can have very large revenue, such as $86b, but not a lot of profit (in this case $860m). And that doesn't even take staffing and fixed costs into account, which would drive that number significantly lower.

Or to put it another way, you can run a company such that you roughly break even, at which point it doesn't matter what your revenue is, $185m is still a big number. In that case hopefully you have a lot of discretion as to how you spend your money such that you can just spend less in one area to account for the $185m, but if you're breaking even because you can't do any better, as opposed to breaking even because you're putting all your profit back into R&D, then $185m might be hard to deal with.

All that said, for a company like Wells Fargo, it probably is basically just a slap on the wrist.

an individual's "discretionary income" can also be used as savings or investment. you're argument doesn't make any sense.

Well yes, it's discretionary. That's what discretionary means - you can use it for whatever you want. Using it for savings or investment in no way invalidates my argument, because that's exactly what I'm talking about. If you have a bunch of money in savings, then getting hit with a $215 fine isn't a big deal, you can pull that small amount of money out and pay it. But the whole point is that since the extra "revenue" you get from a higher salary is discretionary, then you should be able to easily absorb a small fine, but a company with large revenues doesn't necessarily have a lot of discretionary cash.

Now it's certainly possible that your investments aren't liquid enough for you to free up the $215 to pay the fine, but that's a different situation (and is your own damn fault). Companies can be in this situation too, but don't mistake the existence of this situation as a refutation of my argument, because it's not. My argument at its core is that a person making $100k can be expected to much more easily be able to absorb a particular fine than a person (with the same cost of living) making $50k, but you can't necessarily say this about companies, because a person's salary isn't dependent upon how much they spend, but a company's revenue is, and so if company A has a higher revenue than company B that does not mean company A's profits are higher.

Yes, most companies have tighter margins than the average person.

Somebody earning $100k/yr might have, say, $30k/yr left after taxes and expenses, but most companies don't have 140% profit margins.

Most companies aren't Wells Fargo, though, since they don't have $20bn in cash savings, and don't make $36bn profit on their $86bn revenue: a 40% margin.

The numbers only need a slight alteration if we scale the fines by relative disposable income/profit. The $185m fine is about 0.5% of Wells Fargo profits, so for our hypothetical person with $30k/yr left over, it's more like a $154 fine, but he also has a savings account with $16k in.

I'd say the analogy basically checks out in this case.

And why is that? Because they have a yearly revenue of $86B. It's like a country getting nukes at that point, the rules change. It's sick, but we apparently don't care enough to attempt to change it.

$185 million in penalties and $5 million to customers.

SO the government is profiting $185 million, those impacted receive $5m.

I'd even go so far as to say it's worse than that. Those fines aren't coming from the top executives (or even mid-level) who made the decisions to promote this behavior, but rather the investors.

Frankly, it's more of the same, private rewards, socialized costs. "I make millions for the bank with fraud, I make millions. I lose millions for the bank through fraud, the investors lose millions, I still make millions with a golden parachute."

I'm shocked (shocked!) this type of moral hazard still exists in the banking world after 2008! I'm sure Congress will do something to make sure this never happens again.

But remember, this fraud was only perpetrated by a conspiracy of 5300 low-level employees who have already been fired. (and if you believe that, I have a bridge to sell you.)

But to quickly go back to the investors. Not only are these people eating the costs from incredibly poor (and criminal) management, but when the government fails to do anything meaningful, the smaller investors have no real recourse. What are they going to do, sell their stock at a loss? Sue a bank which spends hundreds of millions on lawyers in a year? At least theoretically, the government could get rid of some of the bad apples, but then, who would bribe the politicians?

Maybe a more apt analogy is someone who makes $100k a year having their parents pay a $215 fine?

> Those fines aren't coming from the top executives (or even mid-level) who made the decisions to promote this behavior, but rather the investors.

The investors are responsible for hiring and delegating authority to the top managers of the firm -- and through them the rest of the employees -- they may choose to be hands off, but that doesn't eliminate their responsibility.

The are also responsible for establishing procedures for holding those managers, etc., accountable for harms they cause to customers and/or the firm itself, so if the firm is (and, thereby, the investors are) getting hurt with no recourse, that's largely the investors own fault.

Sure the investors pay for the fraud but...maybe the fraudsters make more money for investors than legitimate businesses even with the (proportionally tiny) fines?

Which brings us to the first rule of whistle-blowing: C.Y.A.

I'm surprised they're talking to the news. If I were them I would be lawyering up right now.

A class action from fired employees?

Not if they signed an arbitration clause as a condition of employment...

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