Wells Fargo & Company
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Wells Fargo & Company (“Wells Fargo”) (NYSE: WFC) common stock from February 24, 2021 through June 9, 2022, both dates inclusive (the “Class Period”). Investors have until August 29, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Wells Fargo is a diversified financial services company that provides banking, investment, mortgage, and consumer and commercial finance products and services in the U.S. and internationally.
In 2020, Wells Fargo expanded its so-called “Diverse Search Requirement”, also referred to as a diverse slate hiring policy, requiring that at least 50% of interview candidates must represent a historically underrepresented group with respect to at least one diversity dimension (including race/ethnicity, gender, LGBTQ, veterans, and people with disabilities) for most posted roles in the U.S. with total direct compensation greater than $100,000 per year. In addition, at least one interviewer on the hiring panel must represent a historically underrepresented group with respect to at least one diversity dimension.
On May 19, 2022, the New York Times published an article entitled “At Wells Fargo, a Quest to Increase Diversity Leads to Fake Job Interviews”. Citing discussions with “seven current and former Wells Fargo employees”, including Joe Bruno, a former executive in the Company’s wealth management division, the article reported, in relevant part, that “[f]or many open positions, employees would interview a ‘diverse’ candidate”, but “that often, the so- called diverse candidate would be interviewed for a job that had already been promised to someone else.” The article further reported that Mr. Bruno was fired after “complain[ing] to his bosses” about the practice. On this news, the price of Wells Fargo shares declined by $0.11 per share, or approximately 0.26%, from $42.11 per share to close at $42.00 per share on May 19, 2022.
On June 6, 2022, Reuters published an article entitled “Wells Fargo pauses diverse slate hiring policy after reports of fake job interviews.” The article reported that “Wells Fargo . . . is pausing a hiring policy that requires recruiters to interview a diverse pool of candidates, after the New York Times reported such interviews were often fake and conducted even though the job had already been promised to someone else.” The same article also reported that “[t]he bank also plans to conduct a review of its diverse slate guidelines, Chief Executive Officer Charles Scharf told staff on Monday, according to a memo seen by Reuters.”
On June 9, 2022, the New York Times published an article entitled “Federal Prosecutors Open Criminal Inquiry of Wells Fargo’s Hiring Practices.” The article reported that federal prosecutors are investigating whether Wells Fargo violated federal laws by conducting fake job interviews in order to meet the Company’s Diverse Search Requirement. The article also revealed that, since the New York Times’ article focusing on the bank’s wealth management business, “another 10 current and former employees have shared stories about how they were subject to fake interviews, or conducted them, or saw paperwork documenting the practice”, and that “sham interviews occurred across multiple business lines, including its mortgage servicing, home lending and retail banking operations.” That same day, Wells Fargo issued a press release entitled “Wells Fargo response to New York Times article”, which confirmed that “[e]arlier this week, the [C]ompany temporarily paused the use of its diverse slate guidelines”, and that, “[d]uring this pause, the [C]ompany is conducting a review so that hiring managers, senior leaders and recruiters fully understand how the guidelines should be implemented – and so we can have confidence that our guidelines live up to their promise.” On this news, the price of Wells Fargo shares declined by $2.59 per share, or approximately 6.07%, over the following two trading sessions, from $42.67 per share to close at $40.08 per share on June 10, 2022.
The lawsuit alleges throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Wells Fargo had misrepresented its commitment to diversity in the Company’s workplace; (ii) Wells Fargo conducted fake job interviews in order to meet its Diverse Search Requirement; (iii) the foregoing conduct subjected Wells Fargo to an increased risk of regulatory and/or governmental scrutiny and enforcement action, including criminal charges; (iv) all of the foregoing, once revealed, was likely to negatively impact Wells Fargo’s reputation; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.