Cases

Gary Hefler et al. v. Wells Fargo & Company et al

Court: United States District Court of the Northern District of California
Case Number: 3:16-cv-05479
Judge: Hon. Jon S. Tigar
Class Period: 02/26/2014 - 09/20/2016
Case Contacts: Salvatore J. Graziano, Adam H. Wierzbowski, Rebecca E. Boon, Michael Mathai

This action asserts claims pursuant to Sections 10(b), 20A, and 20(a) of the Securities Exchange Act of 1934 against defendants Wells Fargo & Company (“Wells Fargo” or the “Company”) and several of its most senior current and former executives and Board members (collectively with Wells Fargo, the “Defendants”) based on alleged false and misleading statements made in connection with the Company’s scandal of creating fake or unauthorized client accounts from February 26, 2014 through September 20, 2016 (the “Class Period”).

Lead Plaintiff Has Reached a Proposed Settlement for $480 Million

The Court-appointed Lead Plaintiff Union Asset Management Holding, AG has reached a proposed settlement of this action for $480 million in cash that, if approved by the Court, will resolve all claims in the action.  The Settlement, which remains subject to court approval, represents the fourth largest securities settlement ever achieved in the Ninth Circuit.

If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the Settlement.  The Settlement Class consists of:

all persons or entities who purchased Wells Fargo common stock from February 26, 2014 through September 20, 2016, inclusive, except for certain persons and entities who are excluded from the Settlement Class by definition (see paragraph 25 of the Notice) or who request exclusion pursuant to the instructions set forth in the Notice (see paragraph 74 of the Notice).

Please read the Notice to fully understand your rights and options.  Copies of the Notice and Claim Form can be found on the Case Documents page.  You may also visit the Settlement website, www.WellsFargoSecuritiesLitigation.com, for more information about the Settlement.

If you are a member of the Settlement Class, in order to be potentially eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked no later than January 23, 2019

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.

IMPORTANT DATES AND DEADLINES

January 23, 2019

Claim Filing Deadline. Claim Forms must be postmarked no later than January 23, 2019 to be eligible for a payment from the Settlement.

November 27, 2018

Exclusion Deadline. To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than November 27, 2018, in accordance with the instructions in the Notice.

November 27, 2018

Objection Deadline. Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses, must be submitted to the Court no later than November 27, 2018, in accordance with the instructions in the Notice.

December 18, 2018
at 2:00 p.m.

Settlement Hearing.  The Settlement Hearing will be held on December 18, 2018 at 2:00 p.m., before the Honorable Jon S. Tigar at the United States District Court, Northern District of California, Courtroom 9 of the Phillip Burton Federal Building & U.S. Courthouse, 450 Golden Gate Avenue, San Francisco, CA 94102.  The Settlement Hearing will be held by the Court to consider, among other things, whether the proposed Settlement is fair, reasonable and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for attorneys’ fees and expenses should be approved.

 

Background

Wells Fargo is the world’s second largest bank by market capitalization, with $1.9 trillion in assets and $1.2 trillion in deposits.  It is a diversified financial services company that provides retail, commercial, and corporate banking services, principally in the United States, to over 70 million customers.  The action alleges that, throughout the Class Period, and despite the existence of the undisclosed fake account fraud, Wells Fargo and its senior officers made a series of materially misleading statements and omissions about its values, strategies, and results concerning “cross-selling”—the practice of selling multiple services to a single customer of the Company.

Specifically, Lead Plaintiff alleges that, throughout the Class Period, Wells Fargo falsely touted the Company’s cross-selling practices by repeatedly representing that its culture was focused around giving customers services that they valued and needed and that its efforts were highly successful and a key driver of strong financial results.  However, after years of maintaining these assurances, various regulators and Wells Fargo suddenly revealed on September 8, 2016 that several regulatory investigations had culminated in findings that Wells Fargo employees secretly and illegally had been opening millions of unauthorized accounts for existing Wells Fargo customers in order to hit performance targets.  Additional disclosures continued throughout the next two weeks, including admissions by then-CEO John Stumpf in congressional testimony that the Company’s highest executives, including himself and the Board, knew about the fake account fraud on a “significant scale” by 2013.  As a result of these disclosures, the price of the Company’s stock plummeted, causing substantial investor losses.

On January 5, 2017, the Honorable Jon S. Tigar of the Northern District of California appointed Union Asset Management Holding AG as Lead Plaintiff, and on May 27, 2017 appointed Bernstein Litowitz Berger & Grossmann LLP as Lead Counsel.  Motion to dismiss briefing was completed on September 25, 2017.  On February 27, 2018, the Court issued an opinion upholding the Plaintiff’s complaint and refusing to dismiss the bulk of the allegations against the bank and its former and current executives. 

On May 4, 2018, the parties announced that they had reached a settlement-in-principle of $480 million in cash to resolve the case.  On July 31, 2018, Lead Plaintiff filed its motion for preliminary approval of the Settlement with the Court and, on September 4, 2018, the Court entered its Order Granting Preliminary Approval of Class Action Settlement, which scheduled a final approval hearing for December 18, 2018.

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