Wells Fargo Ordered to Defend Against Lawsuit Alleging Deceptive Hiring Practices

A US judge has ordered Wells Fargo to face a lawsuit alleging it misled shareholders by claiming a commitment to hiring diversity while conducting sham job interviews with non-white and female applicants it had no intention of hiring.

US District Judge Trina Thompson in San Francisco, who dismissed a version of the lawsuit last August, on Monday found direct and indirect evidence suggesting that the San Francisco-based bank intended to deceive shareholders about its hiring practices.

She rejected arguments that there was insufficient proof of widespread fake interviews or that top officials, including Chief Executive Charles Scharf, were unaware of it.

Shareholders have challenged 11 statements made by the bank promoting the success of a policy adopted in March 2020, which required at least 50% of candidates interviewed for jobs paying at least $100,000 to be minorities, women, or people from other disadvantaged groups.

They cited interviews with former employees, an internal whistleblower email, and the sudden retirement of a senior wealth manager who allegedly pressured the whistleblower into conducting fake interviews.

"The employee-submitted complaints, the peculiar timing of (the manager's) departure, and defendants' demonstrated focus on diversity issues support a strong inference of (fraudulent intent) that is cogent and at least as compelling as an opposing inference that defendants remained oblivious," Judge Thompson wrote.

In a statement, Wells Fargo said it would continue defending against the lawsuit, noting that the Department of Justice and the Securities and Exchange Commission had closed investigations into its hiring practices without taking action.

"Wells Fargo is deeply dedicated to diversity, equity and inclusion and does not tolerate discrimination in any part of our business," the statement added.

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