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Wells Fargo (SEB)

CASE CAPTION             SEB Investment Management AB, et al. v. Wells Fargo & Co., et al.
COURT United States District Court for the Northern District of California
CASE NUMBER 3:22-cv-03811-TLT
JUDGE Honorable Trina L. Thompson
PLAINTIFFS SEB Investment Management AB; West Palm Beach Firefighters’ Pension Fund
DEFENDANTS Wells Fargo & Company, Charles W. Scharf, Kleber R. Santos, and Carly Sanchez
CLASS PERIOD February 24, 2021 to June 9, 2022, inclusive

This securities fraud class action arises out of Wells Fargo’s misrepresentations and omissions regarding its diversity hiring initiative, the Diverse Search Requirement. According to Wells Fargo, the Diverse Search Requirement mandated that for virtually all United States job openings at Wells Fargo that paid $100,000 a year or more, at least half of the candidates interviewed for an open position had to be diverse (which included underrepresented racial or ethnic groups, women, veterans, LGBTQ individuals, and those with disabilities).

Throughout the Class Period, Defendants repeatedly lauded the Diverse Search Requirement to the market. In reality, however, Wells Fargo was conducting “fake” interviews of diverse candidates simply to allow the Company to claim compliance with the Diverse Search Requirement. Specifically, Wells Fargo was conducting interviews with diverse candidates for jobs where another candidate had already been selected. These fake interviews were widespread, occurring across many of Wells Fargo’s business lines prior to and throughout the Class Period. When the relevant truth concealed by Defendants’ false and misleading statements was revealed on June 9, 2022, the Company’s stock price declined significantly, causing significant losses to investors.

On January 31, 2023, Plaintiffs filed a complaint on behalf of a putative class of investors alleging that Defendants Wells Fargo, Scharf, Santos, and Sanchez violated Section 10(b) of the Securities Exchange Act of 1934. In addition, the complaint alleged that Scharf, as CEO of Wells Fargo, violated Section 20(a) of the Securities Exchange Act of 1934. Defendants filed a motion to dismiss on April 3, 2023, which the Court granted with leave to amend on August 18, 2023. On September 8, 2023, Plaintiffs filed an amended complaint. Defendants’ moved to dismiss the amended complaint in October 2023. Briefing on that motion will be complete in January 2024. 

Read the Class Action Complaint for Violations of the Federal Securities Laws Here

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