Wells Fargo lawsuit claims bank has not adequately addressed discriminatory practices

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Wells Fargo lawsuit overview:

• Who: A Wells Fargo shareholder has filed a lawsuit against Wells Fargo and some of the bank’s officials.
• Why: The defendants allegedly breached their fiduciary duties by failing to adequately address issues of discriminatory practices in hiring and lending.
• Where: The Wells Fargo lawsuit was filed in California federal court.

Wells Fargo & Co. and some of the bank’s officials are facing a lawsuit from a shareholder who alleges they breached their fiduciary duties by failing to adequately address issues of discriminatory practices in hiring and lending.

Plaintiff City of Pontiac Reestablished General Employees’ Retirement System, a Wells Fargo shareholder, alleges the bank has “utterly failed” to monitor lending and hiring practices that discriminate against minorities.

“Discrimination against Black Americans and other minority groups in the business world is nothing new,” the Wells Fargo lawsuit says. “While unequal, unfair, and exclusionary practices date back centuries, laws have been on the books prohibiting such conduct for more than 50 years.”

“Wells Fargo and its board have repeatedly failed to address the fact that the company’s algorithm resulted in digital redlining, despite recognizing the importance of ensuring that the company must not discriminate against minority borrowers,” the Wells Fargo lawsuit states.

The plaintiff notes that Wells Fargo is one of the largest mortgage lenders in the country and, as one of the largest corporations, it employs more than 250,000 people.

The complaint points to a May 2022 article in the New York Times that reported on Wells Fargo’s alleged practice of conducting “fake interviews” with minority job applicants for positions that had already been filled. 

Wells Fargo lawsuit says board failed to provide effective oversight into bank’s hiring and lending practices

The plaintiff’s attorneys reportedly reviewed thousands of pages of Wells Fargo documents that indicated that the board was aware of Wells Fargo discrimination but “failed to engage in meaningful and effective oversight” into the company’s lending and hiring practices.

The defendants disseminated false or misleading statements about Wells Fargo discrimination practices in order to artificially inflate the price of the bank’s common stock in violation of the Securities Exchange Act, the Wells Fargo lawsuit asserts.

Wells Fargo recently agreed to pay nearly $98 million to resolve claims from the Department of the Treasury’s Office of Foreign Assets and Control and the Federal Reserve that the bank provided financial software to a European bank that was used to process transactions that violated U.S. sanctions with Iran, Syria, and Sudan.

What do you think about this Wells Fargo lawsuit? Join the discussion in the comments!

The plaintiff is represented by Lesley E. Weaver of Bleichmar Fonti & Auld LLP and Marlon E. Kimpson and William Norton of Motley Rice LLC.

The Wells Fargo discrimination lawsuit is City of Pontiac Reestablished General Employees’ Retirement System v. Steven D. Black, et al., Case No. 4:23-cv-03366-DMR, in the U.S. District Court for the Northern District of California, San Francisco Division.

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