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Wells Fargo agreed on Friday to pay a $575 million settlement. The resolution is expected to end another chapter of legal battles stemming from investigations led by regulators in every US state and Washington, D.C. that has looked into allegations of systemic wrongdoing by the bank.

Employees at Wells Fargo claim that if they had not opened up millions of bogus customer bank accounts as instructed, they would have lost their jobs for failing to meet sales quotas.

Today’s settlement is not the first for Wells Fargo. It paid $185 million in fines when it copped to opening approximately 1.5 million unauthorized, fee-bearing bank accounts that extracted money from their customers. Among other complaints about the bank, the “fake account” scheme, which surfaced in 2016 after many years of operation, did not stop accusers from calling out more bad behavior.

As a trusted party, Wells Fargo not only breached its fiduciary obligation to its customers, it cast a spotlight on how centralized systems can incentivize people to become bad actors, creating shadow operations and backdoor arrangements that bypass rules, laws and regulations. Wells Fargo acknowledged opening millions of deposit, credit card, and other accounts, and conducting transfers of funds without customer approval. The offenses occurred over the course of 15 years, from 2002 to 2017. Lacking a consensus mechanism that checks, balances and effectively restrains nefarious motives, Wells Fargo could engage in a string of offenses that decentralized systems resist, including but not limited to Creating fake bank accounts to meet quotas and draw ongoing fees

Enrolling customers in bill-paying or other services without their knowledge

Charging customers for products they never bought, i.e. life-insurance and renter policies

Overcharging customers for mortgages

Tacking on unwanted auto insurance policies for car loan accounts The notion of an open financial system run on a network of blockchains, by contrast, introduces the concept of stripping away at human intervention that’s intended to subvert various agreements and policies. It takes the business lifecycle, shakes out the cheaters and makes it accountable by removing secrecy and enforcing transparency, traceability and immutability. As Wells Fargo disperses the $575 million settlement to each of the 50 states, chief executive Timothy J. Sloan says, “This agreement underscores our serious commitment to making things right in regard to past issues as we build a better bank.” According to a report by the New York Times, “In February, however, the Federal Reserve said it would restrict the bank from growing until it improved its internal checks and balances significantly. Wells Fargo said at the time that it would replace four directors and submit to an independent review of its oversight and risk-management practices. The bank is still trying to fulfill regulators’ requirements.” Under the settlement, California will collect nearly $148.7 million for Wells Fargo’s deception of its consumers. In a statement, California Attorney General Xavier Becerra said Wells Fargo’s conduct was disgraceful.

“Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future. Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products – from bank accounts to insurance – that they never wanted. This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system. As our investigation found, Wells Fargo’s conduct was unlawful and disgraceful.”

Wells Fargo reported net income of $22.2 billion in 2017. Its top five institutional holders are led by Warren Buffett, chairman and CEO of Berkshire Hathaway; Tim Buckley, president and CEO of Vanguard Group; Larry Fink, chairman and CEO of Blackrock; Abigail Johnson, president and CEO of FMR LLC; and Joseph Hooley, chairman and CEO of State Street.

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