Corporate America Cares

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Dec 22, 2009 11:40 am
More big firm folly: The case of Wells Fargo vs. a former Marine
By Danny Sarch
December 21, 2009
Today's Investment News reports that an ex-Prudential Securities representative, Jay Belanger, is suing his former firm (now Wells Fargo Advisors). Mr. Belanger is a veteran of the Iraq war and upon returning from his service to our country, he discovered that his book of clients had been distributed to other Advisors and would not be returned to him.

Not only did Wells allegedly not protect Mr. Belanger's business, but they attempted to collect on the remainder of the $50,000 note that Mr. Belanger had signed when he was first recruited to Prudential (about $29,000). In my mind, and I would guess in the minds of most rational human beings, Wells Fargo's actions in this case are indefensible and unconscionable. It would not have been difficult to have one or two Advisors “babysit” Mr. Belanger's clients until he returned. And it would not have been difficult to either forgive the note that was owed as good-will for Mr. Belanger's service, or to give him back his book and then restart the clock on his note from when he left off.

But then we are assuming that Wells Fargo is a corporation with a single mind, able to make rational decisions as if it were a sentient, rational businessperson. John Kennedy wrote in a speech: "The essence of ultimate decision remains impenetrable to the observer - often, indeed, to the decider himself." This quotation inspired a book called “The Essence of Decision” where Political Scientist Graham Ellison examines the Cuban Missile Crisis. The book, originally written in 1971, is still on the reading lists at Business Schools around the country. Allison teaches that we must look at the decisions of large institutions, like governments and corporations, not as a decision by a “rational single-minded actor” but a confluence of bureaucratic thoughts and politics of multiple players with different personal agendas.

Using Mr. Allison's “lens” to examine what Wells and its predecessor firms did to Mr. Belanger, I suggest the following scenario (purely Sarch speculation): Mr. Belanger returns from Iraq and the management team in place has no idea who he is, what his book looked like and who his clients are. The systems to track the clients, if they existed, have long been updated and changed. The managers who recruited him are no longer in any position of responsibility to help him now. Whoops. Then, once Mr. Belanger got registered at LPL, his current Broker-Dealer, the system to go after him for his note DID still exist and the collection agency was set upon him like a Rottweiler protecting his owner's bedroom.

This possible explanation does not excuse or exonerate Wells Fargo; it only attempts to understand how it could have happened. Let's see if this Corporation, now under pressure from litigation and under pressure from the shame of this case hitting the press, will have the institutional “cojones” to do the right thing for Mr. Belanger.



Dec 22, 2009 12:39 pm

Wells Fargo screwed Mr. Belanger. I cannot believe that they treated him so badly. It should be an easy thing to return account to a returning soldier.


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Dec 22, 2009 2:04 pm

i bet they wish they could take that decision back    how dumb

Dec 22, 2009 2:16 pm

WFC has had some really bad press lately (exec partying in foreclosed home, the marine (to name a few) - its like they are trying to get into a Law and Order plot.

Dec 22, 2009 5:18 pm

This whole thing is a rotten deal no matter how you look at it for sure.  I wish we knew all the details.  I also want to know how he had an income of 100k on 11 million in assets. 


Dec 22, 2009 7:40 pm

That does suck for him, but it just goes to show that they never really are "your" clients.

Dec 22, 2009 8:25 pm
KensLoveChild:

That does suck for him, but it just goes to show that they never really are "your" clients.



Remember it was Prudential that he worked for. They are the ones that gave his clients away. I have a feeling his gross was 100k not his net. I guess we will find out the whole story in court.

Dec 22, 2009 10:14 pm
Hydeho:
KensLoveChild:

That does suck for him, but it just goes to show that they never really are "your" clients.



Remember it was Prudential that he worked for. They are the ones that gave his clients away. I have a feeling his gross was 100k not his net. I guess we will find out the whole story in court.

Probably correct on all accounts but, as vet this kinda sh!t pisses me off.
Dec 23, 2009 2:36 pm

Wow, you'd think the guy worked for UBS or something.

Dec 23, 2009 5:41 pm

A company is not human, doesn't think like a human. It is a beaurocratic melange of compny speak/thought. You can never expect a fair shake with any company. You may be treated rather well for a while. But that snake is always capable of biting. I wish we would use Sherman Anti-trust laws to limit the size of companies. They are a danger to humans.

Dec 23, 2009 5:59 pm

Probably will, when we citizens move to the solutions stage.


How many of us here believe that big government and big corporations are the wave of the future, in a post-industrial America?
 
If you want to understand what is about to happen, start talking to twenty year olds. They are figuring out the status quo at an exponential rate, and experiencing exponential cultural and geopolitical change.
 
This is the economic convergence of liberal and conservative. You and I are blessed to witness the fastest and most exciting cultural evolution in the history of humanity. Scary but fascinating.
 
There are going to be big "winners" and "losers", but it's not all about money.
Jan 3, 2010 5:13 pm

All I have to say is WTF?



What is wrong with people. I find it incredibly difficult to believe that Wells has never heard of the Soldiers and Sailors Relief Act.



A company that breaks it's sacred trust with it's veterans does not deserve their service. I know there are a a lot of good people there, so this isn't directed at the employees.



That company is a disgrace.