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    If you are a current or former participant in Wells Fargo’s 401(k) Plan, please contact Grant & Eisenhofer P.A. at 888-554-3529 to discuss your potential claim or fill out this form.

Wells Fargo 401(k) Lawsuit

Wells Fargo & Co. Class Action Lawsuit

On Friday, October 7, 2016, a class action lawsuit was filed in the U.S. District Court for the District of Minnesota against Wells Fargo & Company and certain of its executives. The case, brought on behalf of participants in and beneficiaries of Wells Fargo’s $35 billion 401(k) Plan, alleges that Wells Fargo violated the Employee Retirement Income Security Act (“ERISA”) causing class members to sustain hundreds of millions in losses to their retirement plans.

The Details

Allegations in this case stem from Wells Fargo’s unlawful “cross-selling” practices, which allegedly date back to 2010—and may extend back as far as 2005. According to the lawsuit, Wells Fargo, through its management, launched a fraudulent scheme where customers were unknowingly signed up for over two million unauthorized and unwanted accounts and other banking products in order to inflate Wells Fargo’s share price. Incentive compensation plans, high sales quotas, and job security threats to its employees were allegedly imposed by Wells Fargo senior management (including its CEO and Chairman). The complaint also alleges that senior executives sold millions of their personal Wells Fargo stock at inflated prices—earning hundreds of millions of dollars—while failing to protect 401(k) Plan participants.

Michael N. Feuer

Los Angeles
City Attorney

“We found that Wells Fargo’s business model imposed unrealistic sale quotas that, among other things, incentivized employees to engage in highly aggressive sales practices, creating the conditions for unlawful activity...”

 

The lawsuit contends that Wells Fargo’s blatant fiduciary duty breaches, in violation of the ERISA laws, caused its 401(k) Plan participants to lose no less than several hundred million dollars. Wells Fargo had a duty to ensure that its 401(k) Plan had prudent investment options—and a duty not to mislead plan participants regarding those options. Notwithstanding those legal requirements, Wells Fargo breached those duties by allowing Plan participants to invest their money in Wells Fargo stock that Wells Fargo and its executives knew was trading at artificially high prices due to the fraudulent “cross-selling” scheme.

Richard Cordray

Director
Consumer Financial
Protection Bureau

“The fraudulent conduct occurred on a massive scale… The gravity and breadth of the fraud that occurred at Wells Fargo cannot be pushed aside as the stray misconduct of just a few bad apples… …the stunning nature and scale of these practices reflects instead the consequences of a diseased orchard.”

 

As of early October 2016, Wells Fargo management’s failures have resulted in fines of $185 million, a loss of $20 billion in its market capitalization, stock downgrades, significant lost business, and untold reputational damage. Specifically, the Consumer Financial Protection Bureau issued a consent order requiring Wells Fargo to pay a $100 million penalty—the highest penalty ever assessed by the regulator—and to take other remedial action. Further government investigations may also arise, and multiple lawsuits have been filed and are expected seeking various forms of redress for Wells Fargo’s fraudulent actions. It is still unknown what other systemic problems Wells Fargo may be concealing, and which may emerge to even further damage Wells Fargo’s share price and continue to confirm the imprudence of Wells Fargo and its executives making Wells Fargo stock a Plan investment option.

I am a Wells Fargo
401(k) Plan participant.

Can I join
the class action?

Currently, the Class in this case is defined as:

All persons who were Participants of the Wells Fargo & Company 401(k) Plan at any time between January 1, 2014 through the present and whose Plan accounts suffered losses, as defined by ERISA, through investments in Wells Fargo common stock.