Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-wfc-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of Wells Fargo & Company (NYSE:WFC) common stock during the period between October 13, 2017 and October 13, 2020 (the "Class Period"). This action was filed in the Northern District of California and is captioned Mullen v. Wells Fargo & Company, No. 20-cv-7674.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Wells Fargo common stock during the Class Period to seek appointment as lead plaintiff in the Wells Fargo class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Wells Fargo class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Wells Fargo class action lawsuit. An investor’s ability to share in any potential future recovery of the Wells Fargo class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Wells Fargo class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the Wells Fargo class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at email@example.com. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-wfc-class-action-lawsuit.html.
The Wells Fargo class action lawsuit charges Wells Fargo and certain of its current and former officers with violations of the Securities Exchange Act of 1934. Wells Fargo is a global financial services company that provides banking, investment and mortgage products and services, as well as other consumer and commercial financial services. Since 2009, Wells Fargo has dramatically ramped up its commercial lending activities and has become a leading market participant in the securitization of commercial loans, originating and distributing as well as investing in billions of dollars’ worth of collateralized loan obligations ("CLOs") and commercial mortgage backed securities ("CMBS") backed by corporate debt.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Wells Fargo’s business and operations. Specifically, during the Class Period, defendants reassured investors that Wells Fargo’s commercial credit portfolios were of exceptional credit quality and the product of robust, industry-leading underwriting and due diligence policies and procedures. In truth, however, Wells Fargo fueled its rapid commercial loan growth by lending to businesses that posed a heightened risk of default. Wells Fargo systematically concealed these credit risks by artificially inflating the incomes generated by borrowing businesses, relaxing or failing to follow applicable underwriting procedures, and circumventing applicable risk controls. Wells Fargo exacerbated the threat posed by its defective commercial debt by packaging the loans into CLOs and CMBS and widely distributing these securitized products throughout the financial system.
On April 14, 2020, in connection with the release of its first quarter 2020 financial results, Wells Fargo revealed it was taking a massive $4 billion provision expense to account for expected credit delinquencies. On this news, the price of Wells Fargo stock fell 14% over three trading days. On July 14, 2020, Wells Fargo released its second quarter 2020 results, which disclosed that the Company had suffered a $2.4 billion loss during the quarter, or ($0.66) per share, and was taking a $9.5 billion provision expense to account for expected credit delinquencies. On this news, the price of Wells Fargo stock fell 5% to $24.25 per share.
Then, on October 14, 2020, Wells Fargo released its third quarter 2020 results, with the Company announcing that it had recognized another provision expense of $769 million and that non-accrual loans had increased $2.5 billion, or 45%, to $8 billion during the quarter. The price of Wells Fargo stock fell 6% on this news to close at $23.25 per share on October 14, 2020.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.
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Robbins Geller Rudman & Dowd LLP
Brian E. Cochran, 800-449-4900