Last week the former CEO of Wells Fargo John Stumpf was fined $17.5 million and has been banned from ever working in the banking industry again.
You will recall that Wells Fargo were found to have routinely created false accounts for clients in order to meet sales quotas. Regulators found that Stumpf and Wells Fargo senior management created a culture that tolerated, if not promoted, the widespread criminal behavior.
Hopefully this is a significant signal from previous practice where banking and securities industry transgressions have been overlooked and swept under the rug. During the financial meltdown of 2008, President Obama and to only slightly lesser degree President Bush let the financial mismanagement and travesty that almost took down the whole economy go unpunished. Indeed, one of the arguably most disappointing thing about the Obama Administration was that President Obama came to office with a platform to take on the extravagances of Wall Street but then did very little. For all of the financial strain on individuals and on the economy as a whole, and the years it took to recover, not one executive of any of the firms engaged in rampant speculation that could only be called gambling with other people’s money, was convicted of any charges much less served time in prison for their actions. But they did collect huge bonuses prior to the meltdown and most got huge severance payoffs when they left.
Justice should apply equally, no matter how much money someone has. And one could argue that Wall Street executives who commit crimes do more damage, because their crimes affect thousands if not millions of people and someone who steals from someone’s car or home only affects one person.