wells-fargoLast week, during a Senate Banking Committee hearing, Wells Fargo CEO John Stumpf acknowledged that he did have knowledge that employees were creating bogus bank accounts as far back as 2013. In the wake of the controversy we now know that Wells Fargo employees had opened approximately 2 million fake savings and credit card accounts in the names of real customers; and that means he must have known about all or, at least, most of these.

But if he did, in fact, know about these practices for at least the last three years, why did he not disclose the information to the US Securities and Exchange Commission (Or take any action at all, honestly)?

Because, he claims, the information was not “material”—not relevant—to investors.

That’s what he claims, of course, and, of course, we now know that this is far from the case. As such, the company will now have to pay $185 million in fines to federal regulators and both the city and county of Los Angeles; but will also face massive lawsuits.

More importantly, since the scandal came to light, Wells Fargo’s market value has fallen more than $20 billion. Is that relevant to investors?

Financial institutions risk management consulting firm Alco Partners co-owner Michael Arnold advises, “Two million fake accounts is not relevant based on what standard of materiality? What legal counsel would tell a big bank not to disclose such information to regulators?”

After all, SEC rules clearly require companies to inform investors about any trend, behavior, or simple data that might significantly impact the financial performance of said investment. However, that standard has always been more liquid than sound and Wells Fargo’s idea about which information investors actually need to know can vary greatly between the opinions of regulators to investors.

Indeed, corporate risk assessment manager James Vorhies explains, in a segment he wrote in the 2005 Journal of Accountancy, “Matieriality is not a simple calculation. Rather it is a determination of what will vs what will not affect the decision of a knowledgeable investor given a specific set of circumstances related to a fair presentation of a company’s financial statements and disclosures.”

At the end of the day, Stumph argues that the “cross-selling” strategy helps the bank to deepen relationships with their customers. He insists, then, “What hurts us so much is that we spend a lot of time trying to do the right thing. People [who cheat customers] don’t belong here.”