On January 2, 2024, a California federal judge appointed Kessler Topaz and its client the Hollywood Firefighters’ Pension System to lead a consolidated shareholder derivative action against directors and officers of Wells Fargo & Company. In appointing Kessler Topaz and Hollywood Firefighters, the court denied requests by two other shareholders and their counsel to lead the action. Plaintiff challenges the defendants’ failure to comply with regulatory consent orders arising from persistent illegal conduct, including opening unauthorized bank accounts, improperly requiring auto insurance customers did not need, and improperly repossessing automobiles of active military personnel. The action alleges that the directors and officers breached their fiduciary duties by consciously disregarding repeated red flags regarding the Company’s regulatory compliance failures.
Kessler Topaz initiated the litigation by serving a books and records demand pursuant to 8 Del. C. § 220 of the Delaware General Corporation Law in September 2021. After receiving these nonpublic records, Plaintiff filed its complaint on May 19, 2023. Defendants will now likely move to dismiss the action, which KTMC will oppose.