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How To Make 125 Million Dollars in Stocks and Options

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Hey everybody, Dave Bartosiak with Trending Stocks at Zacks.com. How can you make $125 million? You can win the lottery. You can launch a very successful business. You can be a world class athlete. Or you can retire from Wells Fargo after heading a unit that cost the bank $185 million in fines. Wait, what?

Last week the story broke that employees of the bank had secretly created millions of unauthorized bank and credit card accounts for customers. Over the last five years, the phony accounts made the banks fees and helped employees boost their sales figures to hit targets and make themselves a few extra bucks. 

Well, the Consumer Financial Protection Bureau caught wind of this and opened an investigation. Wells Fargo went out and fired 5,300 rank and file employees who practiced the fraud and was hit with a hefty fine. $100 million to the CFPB’s Civil Penalty Fund, $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. And what about the one heading this department? Was she fired too? Nope. 

Head honcho Carrie Tolstedt not only gets to keep a yearly incentive of $5.5 million in stock each of those 5 years in question, but she also leaves her post with nearly $125 million in stock and options. She gets to keep it all because she voluntarily retired rather than being fired. If she were fired, like 5,300 other people under her supervision, she would have had to give back $45 million, leaving her with only $80 million in stock and options. 

That’s gotta make shareholders like Warren Buffet and Berkshire Hathaway very happy. Oh, you didn’t know 5,300 people working for you were lying for 5 years? Here’s an eighth of a billion dollars. 

Which brings us to today’s phrase that pays, “Golden Parachute. When a C-Level Exec gets paid big bucks to leave and never come back. This is a direct contrast to what most people get, a security escort out of the building and a rejection of their unemployment benefits. 

Analysts have yet to weigh in on the news here, staying pat with their earnings estimates and keeping Wells Fargo as a Zacks Rank #3 (Hold). But the bank has officially given up the title of largest US Bank to JPMorgan Chase. JPMorgan is now worth $240 billion, while Wells Fargo is an anemic $236 billion. 

Every time you share this video, somebody with a golden parachute gets kicked out of a window. Comment in the section below. Tell me what you’d do with $125 million. Subscribe to the YouTube channel, Twitter @bartosiastics, and come back for all the Trending Stocks with Zacks.com, I’m Dave Bartosiak.


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