Wells Fargo settles fake DEI job interview claims in class-action suit for $85M

Wells Fargo has agreed to a $85 million settlement in a class-action lawsuit stemming from allegations that the bank held fake job interviews with diverse candidates between February 2021 and June 2022. Investors claimed these interviews were “shams,” conducted even after a candidate had already been selected, and sued after stock prices dropped following media reports. While Wells Fargo denies the claims, it settled to avoid further litigation. The lawsuit, filed in the U.S. District Court for the Northern District of California, alleged violations of securities laws due to misleading statements about the bank’s diverse hiring practices, which required at least half of candidates for high-paying positions to be from diverse backgrounds.

The settlement fund will be distributed to shareholders who owned Wells Fargo stock between February 24, 2021, and June 9, 2022, with payments prioritized based on stock ownership during that period. The $85 million represents between 4.25% and 8.5% of the estimated $1 billion to $2 billion in potential damages.

Following the allegations, Wells Fargo adjusted its public reporting on diversity, equity, and inclusion (DEI) efforts, a change coinciding with increased scrutiny and a presidential executive order against DEI initiatives. Despite this, the bank maintains its commitment to diversity, reporting that 46% of its workforce is from diverse racial and ethnic backgrounds.

(Source：Charlotte Observer)