FILE PHOTO: Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith
September 30, 2021
By Jonathan Stempel
NEW YORK (Reuters) – A federal judge on Thursday rejected Wells Fargo & Co’s bid to dismiss a lawsuit accusing the fourth-largest U.S. bank of defrauding shareholders about its compliance with consent orders from U.S. regulators governing its conduct.
U.S. District Judge Gregory Woods in Manhattan said the plaintiff shareholders plausibly alleged that some statements by various bank officials, including former Chief Executive Tim Sloan, were “deliberately or recklessly false or misleading.”
Woods dismissed claims against Sloan’s successor Charles Scharf, saying he was not culpable for the dissemination of those statements.
Wells Fargo and lawyers for the defendants did not immediately respond to requests for comment. Lawyers for the shareholders did not immediately respond to similar requests.
The San Francisco-based bank has been subject since 2018 to consent orders from the Federal Reserve and two other regulators to improve governance and oversight.
Those orders followed a series of scandals beginning in 2016 that highlighted Wells Fargo’s mistreatment of customers, including the opening of millions of unauthorized accounts and charging borrowers for insurance they did not need.
The Fed has capped Wells Fargo’s assets at $1.95 trillion until the bank improves its governance and risk controls.
Wells Fargo has paid more than $5 billion in fines since the scandals began.
Source: One America News Network
