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Wells Fargo & Company Securities Class Action Lawsuit

Case Summary

Company Name
Wells Fargo & Company
Stock Symbol
WFC
Class Period
February 2, 2018 to March 10, 2020
Court
Southern District of New York

The Wells Fargo & Company securities class action lawsuit charges Wells Fargo and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Wells Fargo common shares between February 2, 2018 and March 10, 2020 (the “Class Period”).  The Wells Fargo securities class action lawsuit was commenced on June 11, 2020 in the Southern District of New York and is captioned Perry v. Wells Fargo & Company, No. 20-cv-04494.

Wells Fargo is a financial services company that provides a range of products and services, including banking, consumer finance, credit cards, investments, leasing, and mortgages.  On February 2, 2018, Wells Fargo entered into a Consent Order with the Board of Governors of the Federal Reserve System (“FRS Consent Order”), which required Wells Fargo to comply with the Federal Reserve System’s (“FRS”) directives regarding its governance and risk management policies.  The FRS Consent Order was part of an enforcement action brought against the Company in connection with certain of its fraudulent practices.  Soon thereafter, on April 20, 2018, Wells Fargo entered into yet another consent order with the Consumer Fraud Protection Bureau and the Office of the Comptroller of the Currency (“OCC Consent Order”), which required Wells Fargo to, among other things, develop a comprehensive plan for identifying and remediating present and future consumer harm.

The Wells Fargo securities class action lawsuit alleges that defendants made false and/or misleading statements and/or failed to disclose that: (i) Wells Fargo had inadequate disclosure controls and procedures and internal controls over financial reporting, particularly with respect to its risk and compliance management, policies and programs; (ii) Wells Fargo was not compliant with the regulatory consent orders entered into in 2018; (iii) Wells Fargo’s remediation plans were inadequate, incomplete, and insufficient to prevent future consumer abuses; (iv) as a result of the continued non-compliance with the regulatory consent orders, Wells Fargo was threatened with supervisory and/or enforcement actions and penalties; (v) Wells Fargo’s remediation measures and risk and compliance management remained inadequate to protect against consumer fraud; and (vi) as a result of the foregoing, defendants’ positive statements about Wells Fargo’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis and omitted materials facts.

On March 4, 2020, via the publication of a 113-page report, the market learned that Wells Fargo “fell woefully” short of implementing meaningful corporate reforms and that its risk and compliance policies remained dangerously inadequate to prevent another consumer fraud from occurring.  In other words, instead of fixing its broken compliance infrastructure, Wells Fargo had engaged in a series of window dressing changes to quench investors’ demands, while remaining non-compliant with the regulatory directives in violation of the FRS and OCC Consent Orders.  On this news, Wells Fargo’s common share price fell more than 10% over two trading days, from $41.40 per share to $37.09 per share.

Then, on March 10, 2020, the Chairperson of the U.S. House Financial Services Committee, Maxine Waters, requested that the U.S. Department of Justice investigate Wells Fargo’s former CEO, defendant Timothy J. Sloan, for providing false statements in the context of his public testimony a year earlier, in March 2019, which directly related to Wells Fargo’s compliance with the FRS and OCC Consent Orders and its progress in developing and implementing effective and meaningful reforms. On this news, Wells Fargo’s common share price fell more than 20% over two trading days, from $34.63 per share to $27.20 per share.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

Class Period: February 2, 2018 - March 10, 2020
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