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This is literally a first time in thirteen years that I have been running this blog that I am substantially changing the point of one of my posts.

One of the greatest powers a human being has is the ability to change their position on an issue. This usually occurs when new evidence is brought to ones attention that causes a reconsideration. I always try to arrive at the correct conclusion the first time and thus prevent this from occurring. I will admit that I am a flawed person who makes many mistakes daily. I failed to consider the full ramifications of what I wrote below.

If you read the original post, I speak of holding both the company and the people who have done bad severely accountable to the tune of crushing financial fines. After a similar story about Deutsche Bank being "fined" for $14 Billion because another country fined Apple for the same amount, I listened to Dan Bongino talk about the ripple effects if Deutsche Bank being crippled or driven out of business entirely due to this crippling fine.

I still believe that those directly responsible for committing "bad acts" be civilly and criminally punished in the most harshest manner possible. Criminal prosecutions attached with large fines and prison time, plus crippling civil lawsuits from those injured by the bad acts.

The change I have arrived at is that the company should not be fined. For large companies/corporations like Wells Fargo which employ hundreds or thousands of people who did and are doing what they should be doing, if the company is fined out of existence, the ripples will turn into tsunamis. The good employees will be suddenly unemployed, customers are left in the lurch, plus all of the other ripple effects that will hurt others unnecessarily who have no connection to the bad acts.


As you may have heard, Wells Fargo has been caught with its proverbial hand deep in the cookie jar.

Over at least the past seven years, there has existed a corporate culture of setting ill-advised metrics for employees. Many employees were given "sales quotas," meaning they had to have customers start so many of their various "financial products" such as credit cards, bank accounts with them and so on. The bad news is when the customers didn't do it on their own, the employees "helped" the customers open those accounts. This resulted in millions of dollars of bank fees, overdraft fees, interest charges and on and on.

This unethical behavior was approved and encouraged by management. Employees who actually had personal ethics and didn't engage in this behavior were penalized and fired.

Now that this scheme has been discovered, 5,300 employees who engaged in this have been fired and a fine of $185 million has been levied against Wells Fargo. That may seem like a lot of cash, however when compared against the 2015 total profits of almost $22.9 billion from total revenue of $86 billion, that fine equates out to be 0.8% of their profits. I would call that pocket change.

Ideally, people and businesses should always act to do positive things and not injure those they interact with. Of course, this ideal will never be reached, however if we apply appropriate external incentives, we can at least hold these grevious incidents to a minimum.

When you consider how hard it is to "pierce the corporate veil" to hold executives, managers and employees personally liable, both criminally and civilly, this needs to change.

First and foremost, the laws need to be simplified and consolidated. To have a thousand ways to be assessed a fine and civil liabilities like I propose below is unreasonable and subject to abuse by governmental agents and agencies. The laws must be simple and clear as much as possible.Instead of working off exact numbers, let's try percentages. Penalties from the government the corporation, let's assign a penalty of 50% of their gross revenues for each year this violation happened. For those executives and other board members who can be shown they were knowledgeable and/or culpable in bad behaviors, confiscate 95% of their net worth. That would still leave the CEO of Wells Fargo John Stumpf with about $2.5 million out of his current $50 million personal fortune. Junior executives, management and employees could be fined lesser but still heavy percentages. That's just the fines from government.

As far as individuals suing those responsible, whatever damages they can show, multiply it by 100. If a customer was bilked out of $10,000 by the company and specific individuals, let's award them $1,000,000.

I can hear some people screaming, "You'll destroy the company and those people!!!" That's my point. Do you really want a company to continue to provide goods and services to you or those you love after a grievous breach of trust? To allow them to continue to do business with many, if not all of the leadership team intact? Really, what is preventing Wells Fargo or any other company guilty of a breach of trust from going right back to doing business just like before?

If there were laws like this in place where you know if you step over that line you would personally be financially crushed and the company along with you, how likely would you engage in this kind of activity? Hopefully, not very likely.

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