Wells Fargo & Co. has filed a motion asking a California federal judge to dismiss a lawsuit that alleges it deceived investors with false promises to interview diverse job candidates.
The financial institution said in its motion that the proposed class action hasn't proven that company leadership knew about "isolated" incidents in which fake interviews were allegedly conducted.
The shareholder lawsuit claims Wells Fargo propped up its stock by misleading investors about its commitment to workplace diversity and failing to disclose the truth about its hiring practices. The company filed its motion to dismiss 10 months after an investor lodged the proposed class action, claiming that articles published by the New York Times in the spring and summer of 2022 led to an 8.6% price decline in Wells Fargo's stock price.
According to the Times' articles, some bank employees faked interviews for positions that had already been filled, in order to meet a company target on diversity. The company policy, enacted in 2020, required that at least 50% of candidates for positions making more than $100,000 per year be from diverse backgrounds. Candidates could include people who identified as racial minorities, women, members of the LGBTQ+ community, veterans, or people with disabilities, according to court documents.
Wells Fargo said the plaintiffs in the lawsuit did not prove there was widespread noncompliance with the interview guidelines, which the company discussed on many occasions both in investor filings and with the media. Wells Fargo also said investors didn't offer any evidence that Wells Fargo executives, including CEO Charles Scharf, knew of the alleged fake interviews.
The lead plaintiff, appointed in November, shouldn't be allowed to amend the complaint, because it "has had months to investigate its claims, with the benefit of persistent media attention and public interest," the company said in its motion to dismiss. "Nevertheless, plaintiffs still have not been able to muster sufficient allegations to plead adequately their claims. They should not be afforded another opportunity to try do so."
The proposed investor class is represented by Jennifer Joost, Naumon Amjed, Darren Check, Ryan Degnan, and Karissa Sauder of Kessler Topaz Meltzer & Check LLP.
