Final answer:
Wells Fargo faced significant compliance risk (option b) due to illegal practices such as enrolling customers in unnecessary insurance and creating bank accounts without consent, leading to reputational and financial damages and the resignation of CEO John Stumpf.
Step-by-step explanation:
Wells Fargo suffered significant damage as a result of ignoring compliance risk. Compliance risk refers to the threat posed to a company's financial, organizational, or reputational standing resulting from violations of laws, regulations, codes of conduct, or organizational standards of practice. Since Wells Fargo CEO John Stumpf's resignation was due to the company's engagement in illegal actions such as enrolling customers in unnecessary auto insurance programs and fraudulently creating bank accounts without client consent, it shows a clear disregard for compliance with legal and regulatory standards.
Over a million victims were impacted by these unauthorized actions, facing improper fees, overcharged insurance, credit score reductions, and wrongful vehicle repossession. The fact that these actions were criminal yet resulted in no jail time for Wells Fargo executives highlights a disparity between corporate deviance and punishment, as well as varying perceptions of the impact of such actions.