Does this case prove Goodhart's Law?

No, and it is worth being precise about why. A single case with no control group cannot establish a general law. What the enforcement record establishes is that the conduct occurred, that it was widespread, and that investigators connected it to sales pressure. Reading it through Goodhart's formulation is an interpretive lens that organizes the facts, not a proof of the mechanism.

Was this just a few dishonest employees?

The bank's own internal review terminated roughly 5,300 people, which is too many to describe as a character problem in a workforce and too few to have changed anything structural. A pattern that survives the removal of thousands of individuals is usually being produced by something other than the individuals.

What is the practical test for a metric at risk?

Ask what the cheapest way to move the number would be for someone who has to move it, and then ask who would notice. When the cheap route does not require the underlying outcome, and detection is unlikely, the metric is under pressure whether or not anyone has acted on it yet.

business · 2011 to 2020

The Metric That Ate the Goal: Wells Fargo and the Number Nobody Could Miss

A bank wanted deeper customer relationships. It measured product counts instead, attached careers to the count, and got millions of products customers had never asked for.

Enforcement facts drawn from the CFPB's 2016 consent order and the 2020 Justice Department resolution; the metric-gaming reading is labeled as modeled analysis.

On September 8, 2016 the Consumer Financial Protection Bureau issued a consent order against Wells Fargo Bank finding four practices carried out without customers' knowledge or consent: opening deposit accounts and moving customers' own funds into them, submitting credit-card applications in customers' names, enrolling customers in online banking services they had not requested, and ordering and activating debit cards using customers' information [VERIFIED].

The Bureau's estimates covered January 1, 2011 through the order's date: roughly 1.5 million deposit accounts that may not have been authorized, and roughly 565,000 credit-card applications that may not have been authorized [VERIFIED]. The penalties announced that day totaled 185 million dollars, split as 100 million to the Bureau, 35 million to the Office of the Comptroller of the Currency, and 50 million to the Los Angeles City Attorney [VERIFIED]. The consent order records that the bank had already terminated roughly 5,300 employees in connection with its own internal review [VERIFIED].

Sources

[VERIFIED] The four practices found, the January 2011 to September 2016 period, the estimates of roughly 1.5 million deposit accounts and 565,000 credit-card applications, and the roughly 5,300 employee terminations Consumer Financial Protection Bureau, consent order In the Matter of Wells Fargo Bank, N.A., File No. 2016-CFPB-0015, filed September 8, 2016
[VERIFIED] The enforcement action and the 185 million dollar total in civil money penalties, of which 100 million to the Bureau Consumer Financial Protection Bureau, enforcement action record, Wells Fargo Bank, N.A. (2016)
[VERIFIED] The 35 million dollar civil money penalty assessed by the Office of the Comptroller of the Currency and its restitution order for unsafe or unsound sales practices Office of the Comptroller of the Currency, news release NR 2016-106, September 8, 2016
[VERIFIED] The February 21, 2020 resolutions with the Justice Department and the Securities and Exchange Commission totaling 3 billion dollars, the described 2002 to 2016 conduct of pressure to meet unrealistic sales goals, and the 500 million dollar investor fund Department of Justice press release, Wells Fargo Agrees to Pay 3 Billion Dollars to Resolve Criminal and Civil Investigations into Sales Practices, February 21, 2020 (archived record)
[VERIFIED] Goodhart's formulation that an observed statistical regularity tends to collapse once pressure is placed upon it for control purposes, restated by the author in a later journal article C. A. E. Goodhart, The ECB and the Conduct of Monetary Policy: Goodhart's Law and Lessons from the Euro Area, JCMS: Journal of Common Market Studies 44 (2006), 757 to 778