This securities class action arises from Defendants’ material false and misleading statements and omissions regarding Wells Fargo’s diversity hiring initiative, the Diverse Search Requirement. This initiative was purportedly implemented to increase diversity in Wells Fargo’s senior ranks and to enable the bank to regain investor trust following several costly corporate scandals. The Diverse Search Requirement mandated that for virtually all U.S. job openings that paid $100,000 a year or more, at least half of the candidates interviewed had to be diverse. Yet, for years, diverse candidate interviews were shams, conducted despite the diverse candidates not having a legitimate chance at obtaining the job or another candidate already selected for the position. These “fake” interviews boosted Wells Fargo’s touted statistics about the success of the Diverse Search Requirement and allowed the bank to claim that it complied with the Diverse Search Requirement.
The truth emerged on June 9, 2022, when The New York Times published an article disclosing that current and former Wells Fargo employees confirmed that “fake” interviews were prevalent throughout the Company, and also occurred in many of the bank’s business lines. The New York Times additionally revealed the United States Attorney’s Office for the Southern District of New York had opened a criminal investigation into whether the bank violated federal law by conducting the sham interviews. In response to this news, Wells Fargo’s stock price fell more than 10% over two trading days.
On January 31, 2023, Plaintiffs filed an amended complaint. Defendants filed a motion to dismiss on April 3, 2023, which the Court granted on August 18, 2023. On September 8, 2023, Plaintiffs filed a second amended complaint. Defendants again filed a motion to dismiss the case.
On July 29, 2024, the Court issued an opinion denying Defendants’ motion to dismiss in its entirety, sustaining every false statement alleged in the second amended complaint. Further, the Court held that Plaintiffs sufficiently alleged, through several avenues, that all Defendants knowingly made false statements that misled investors. Accordingly, the case proceeded to discovery.
On January 17, 2025, Plaintiffs filed their motion for class certification, accompanied by a legal brief, the report of their market efficiency expert, declarations by each Plaintiff, and other supporting materials. Defendants’ opposition brief was filed on February 14, 2025, and Plaintiffs’ reply brief was filed on March 14, 2025. On April 25, 2025, the Court granted Plaintiffs’ motion for class certification, certifying the proposed class of investors and appointing Lead Plaintiff SEB Investment Management AB and additional plaintiff West Palm Beach Firefighters’ Pension Fund as class representatives. On May 9, 2025, Defendants filed a petition for permission to appeal the order granting the motion for class certification, which the Ninth Circuit Court of Appeals denied on July 17, 2025.
On July 7, 2025, after fact discovery had closed, Defendants filed a motion for summary judgment, and the parties filed cross-motions to exclude expert testimony.
In September 2025 – with summary judgment and Daubert motions fully briefed and pending before the Court, trial scheduled for early 2026, and on the eve of the parties’ summary judgment hearing – Plaintiffs negotiated an $85 million all-cash settlement to resolve the action. On November 13, 2025, the Court granted Plaintiffs’ motion for preliminary settlement approval. Pursuant to the preliminary approval order, notice of the proposed settlement is being disseminated to potential class members by the Settlement Administrator and published in The Wall Street Journal and transmitted over the PR Newswire. The settlement notice, claim form, and other relevant information is available on the Settlement Administrator’s case website, www.WellsFargoSecuritiesAction.com.
On February 26, 2026, Lead Plaintiffs filed motions for final approval of settlement. A final approval hearing was held on May 6, 2026, where the Court granted final approval of settlement, the plan of allocation, and awarded Lead Plaintiffs attorneys’ fees and reimbursement of litigation expenses. The settlement provides $85 million in cash for the benefit of the Settlement Class.
