Wells Fargo must face lawsuit over sham job interviews

Wells Fargo is required to face a lawsuit over allegations of conducting fake job interviews. The lawsuit claims that the bank held sham interviews with minority candidates for positions that had already been filled, raising serious concerns about its hiring practices and commitment to diversity. This legal challenge could have significant implications for Wells Fargo's reputation and operations.

A U.S. judge ordered Wells Fargo (WFC.N) to face a lawsuit alleging it defrauded shareholders by proclaiming its commitment to hiring diversity while conducting sham job interviews with non-white and female applicants it had no plans to hire.

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

She rejected arguments that there was insufficient proof that fake interviews were widespread or that top officials, including Chief Executive Charles Scharf, knew about them.

Shareholders challenged 11 bank statements that touted the success of a policy adopted in March 2020, requiring 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," Thompson wrote.

In a statement, Wells Fargo said it would continue defending against the lawsuit. It noted that the Department of Justice and Securities and Exchange Commission 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 bank added.

Lawyers for the shareholders did not immediately respond to requests for comment.

The fourth-largest U.S. bank has faced many complaints and public criticism over its business practices since 2016 and remains under a Federal Reserve cap on asset growth.

Wells Fargo's share price fell 10.2% over two days in June 2022, wiping out more than $17 billion of market value, after the New York Times reported the Justice Department probe.

The case is SEB Investment Management AB et al v Wells Fargo & Co, U.S. District Court, Northern District of California, No. 22-03811.

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Source: Reuters‍