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For many investors, dividends play a key role in evaluating the return of a common stock and the main reason for making the investment. For those investors, dividends are a necessary aspect since they are a vital source of income. But with the Covid-19 pandemic, many corporations have been adversely affected by a global economic slowdown. For publicly traded corporations, depending on its industry, dividends have been sharply affected to the point of either being reduced or suspended indefinitely. Using the Standard and Poor’s 500 stock index as a guide, stock analysts can possibly acquire a better understanding as to how reduced or suspended dividend income will affect different investors. The aim and purpose of this paper is to examine the affect the reduction and suspension of dividends will have as a source of needed income for private investors, pension funds, mutual funds, insurance companies, and real estate investment trusts.

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This case study deals with one of the biggest financial scandals in the new millennium among the banking sector in which the banking giant, Wells Fargo & Company (WFC), has opened millions of accounts without acknowledging its customers. It has been charging various fees without the consent of the company's existing clients, and it has involved many people with the personal credit crisis. On the contrary, senior management team was rewarded enormously for the rocketing profits resulting from the phony accounts numerous fees and elevated the bank's share price in a relatively short time. After the accounts scandal was unveiled by its employees and reported by the media, Wells Fargo's reputation was in great danger. While reputation is vital for almost all companies, it is especially essential for the financial services industry, where reputation is a deep-rooted culture. Crisis management strategies in the new era of digital transformation for companies like Wells Fargo as well as other financial services companies are crucial. Risk management is essential in today's business world, but crisis management as contingent plans cannot be ignored since events are not always going as many think they would be.

This paper provides empirical evidence of how scandals could affect financial institutions in terms of market stock price, yearly returns, and the length of time it took to regain the public’s trust and ultimately recover in the long run. Moreover, we carefully examine the importance of dealing with crisis management in the digital transformation era’s financial service sector. We specialize in crisis management, which aims to mitigate the destruction of companies’ public crises in existence. Finally, based upon investigating scandals in public and private financial sectors in the United States, we list 21 strategic crisis management plans at the end of the paper to handle financial services sector scandals in the digital transformation era.