Wells Fargo & Company

Henry Wells and William Fargo founded Wells, Fargo & Co. in San Francisco in 1852, during the California Gold Rush. The company provided banking services and express delivery to miners and merchants — carrying gold, cash, and valuables by stagecoach across the American West at a time when no reliable financial infrastructure existed. The Wells Fargo stagecoach became one of the most recognisable symbols of the American frontier. The company survived the 1906 San Francisco earthquake, two world wars, and the Great Depression.

Wells Fargo merged with Norwest Corporation in 1998, creating one of the largest banks in the United States. The combined bank was operationally led by Norwest's management — a pattern of the nominal acquirer being taken over that would recur in banking consolidation. The merger positioned Wells Fargo as a retail banking powerhouse focused on cross-selling multiple products to existing customers. This cross-selling culture would eventually become the source of its greatest scandal.

During the 2008 financial crisis, Wells Fargo acquired Wachovia — one of the largest U.S. banks, which was on the verge of collapse — for $15.1 billion, outbidding Citigroup in a weekend auction. The acquisition nearly doubled Wells Fargo's size and gave it a national branch network. Wells Fargo emerged from the financial crisis as one of the strongest large U.S. banks, with Warren Buffett's Berkshire Hathaway as its largest shareholder.

In September 2016, Wells Fargo paid $185 million in fines after regulators found that employees had opened approximately 2 million unauthorised deposit and credit card accounts in customers' names without their knowledge. The accounts were opened to meet aggressive internal sales targets — employees who failed to meet quotas faced termination. The number of fake accounts was later revised upward to 3.5 million. CEO John Stumpf resigned. Wells Fargo paid over $3 billion in total settlements. The scandal became the defining example of how incentive structures can corrupt an entire organisation at scale.

The Federal Reserve took the unprecedented step in February 2018 of capping Wells Fargo's total assets, prohibiting the bank from growing beyond its size at the end of 2017 until it demonstrated improved governance and controls. The asset cap remained in place for over five years — costing Wells Fargo an estimated $4 billion in lost revenue and preventing it from competing effectively during a period of strong economic growth. It was the most severe regulatory action taken against a major U.S. bank outside of a financial crisis. The cap was eventually lifted in February 2024, more than six years after it was imposed. The bank that had carried gold across the frontier had been brought low by fake checking accounts.