Wells Fargo & Company

On May 19, 2022, the New York Times published an article which alleged, among other things, that for many open positions, interviews were held with diverse candidates, but “that often, the so-called diverse candidate would be interviewed for a job that had already been promised to someone else.” The article also reported that the Company’s former executive in the wealth management division had been fired after complaining to his bosses about the practice.

On this news, Wells Fargo common stock fell $0.44, or 1%, over two trading sessions to close at $41.67 per share on May 20, 2022.

Then, on June 6, 2022, Reuters published an article reporting that, in response to the New York Times article, Wells Fargo paused its hiring policy that required recruiters to interview a diverse pool of candidates, and that it also planned to “conduct a review of its diverse slate guidelines.

Then, on June 9, 2022, the New York Times reported that federal prosecutors were investigating whether Wells Fargo violated federal laws by conducting fake job interviews in order to meet its Diverse Search Requirement. The same day, Wells Fargo responded that it was “conducting a review so that hiring managers, senior leaders and recruiters fully understand how the guidelines should be implemented.”

On this news, Wells Fargo common stock fell $3.68, or 8.2%, over two trading sessions to close at $38.99 on June 13, 2022, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Wells Fargo had misrepresented its commitment to diversity in the Company's workplace; (2) Wells Fargo conducted fake job interviews in order to meet its Diverse Search Requirement; (3) the foregoing conduct subjected Wells Fargo to an increased risk of regulatory and/or governmental scrutiny and enforcement action, including criminal charges; (4) all of the foregoing, once revealed, was likely to negatively impact Wells Fargo's reputation; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.