Charlie Munger on the WELLS FARGO SCANDAL (3 KEY INSIGHTS) 🔥 ALL HE EVER SAID 👍🏼🔎

EVERYTHING CHARLIE MUNGER HAS EVER SAID ON THE WELLS FARGO SCANDAL IN 2016 AT ALL BERKSHIRE HATHAWAY MEETINGS.

1. THE INCENTIVE SYSTEM WAS WRONG
"If you’re in a business where you have a whole a lot of people under incentives very likely to cause a lot of misbehavior, of course you need a big compliance department.
Every big wirehouse stock brokerage firm has a huge compliance department. And if we had one, we would have a big compliance department too, wouldn’t we, Warren?

WARREN BUFFETT: Absolutely.

CHARLIE MUNGER: Absolutely, but doesn’t mean that everybody should try and solve their problems with more and more compliance.
I think we’ve had less trouble over the years by being more careful in whom we pick to have power and having a culture of trust. I think we have less trouble, not more.

WARREN BUFFETT: But we will have trouble from time to time.

CHARLIE MUNGER: Yes, of course. We’ll be blindsided someday.

2. THE BANK WILL BE BETTER GOING FORWARD
"I think Wells Fargo is going to be better going forward than it would have been if these leaks had never been discovered.

WARREN BUFFETT: Or happened.

CHARLIE MUNGER: Yeah, so I think it’s — it — but I think Harvey Weinstein has done a lot for improving behavior, too. (Laughter)
It was clearly an error, and they’re acutely aware of it and acutely embarrassed, and they don’t want to have it happen again.
You know, if I had to say which bank is more likely to behave the best in the future, it might be Wells Fargo, of all of them.

3. IT WAS HONEST ERRORS OF JUGDMENT
Well, I don’t think people ought to go to jail for honest errors of judgment. It’s bad enough to lose your job. And I don’t think that any of those top officers was deliberately malevolent in any way. I just — we’re talking about honest errors in judgment.
And I don’t think (former Wells Fargo CEO) Tim Sloan even committed honest errors of his judgment, I just think he was an accidental casualty that deserve the trouble. I wish Tim Sloan was still there.