Wells Fargo: Fake Accounts Scandal

Elias LLC and co-counsel recently filed an ERISA class action lawsuit on behalf of Wells Fargo’s 401(k) Plan participants who suffered hundreds of millions of dollars in losses as a result of the massive fraudulent accounts scandal recently disclosed to the public.

Wells Fargo’s senior executives, including its CEO and Chairman, implemented a cross-selling culture and incentive structure that encouraged and caused employees to sign up customers for over two million unauthorized accounts and credit cards in order to generate inflated share price growth for Wells Fargo over a period of several years.

Wells Fargo senior executives lined their own pockets as a result–receiving exorbitant compensation, bonuses, and stock options while the fraud was ongoing. Rather than investigating and eliminating the fraudulent activities, they profited before the scheme became public–selling millions of their personal Wells Fargo stock at inflated prices and earning hundreds of millions of dollars in the process.

At the same time, Wells Fargo intentionally withheld material non-public information about the criminal epidemic while continuing to invest its 401(k) Plan funds in Wells Fargo stock, knowing that it was artificially inflated, the conduct was ongoing, and the Plan would suffer severe losses when the fraud was finally revealed.

By failing to protect the 401(k) Plan through earlier corrective actions, public disclosure, and different investment strategies, Wells Fargo and its executives violated their fiduciary duties and cost Plan Participants hundreds of millions of dollars in retirement savings.

The case, In re Wells Fargo ERISA 401(k) Litigation, No. 0:16-cv-03405, is pending in federal court in the District of Minnesota.

Read the Complaint.

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Related Media Coverage: 

Bloomberg: Wells Fargo Is Your Last Warning: Check Your 401(k)
Plan Advisers: Participants Move Quickly with Wells Fargo Stock Drop Suit