California residents may already know that Wells Fargo and some of its high-ranking executives now have a third lawsuit against them as a result of unethical practices tied to the bank’s consumer and retails divisions. The lawsuit alleges the defendants were aware that the value of Wells Fargo’s stock was inflated and that they continued to present the stock to employees as a prudent investment option.
Wells Fargo allegedly established aggressive sales quotas which motivated low-level bankers to open millions of accounts in customer’s names without their authorizations. When these tactics were revealed to the public, the market value of Wells Fargo stock dropped, resulting in a 12 to 15 percent decline in share price year-over-year from 2015 to 2016.
The lawsuit, filed in the U.S. District Court for the District of Minnesota, seeks class action certification based on the Employee Retirement Income Security Act and argues the defendants could have put an end to new Wells Fargo Stock Fund investments without violating insider-trading laws. Preventing new stock purchases would have protected investors without violating securities laws, according to the plaintiffs. The court’s decision on that point will be critical to the case’s outcome.
In addition to potential liability arising from the lawsuits, Wells Fargo also faces penalties nearing $200 million and more fines may be levied in the future. Class action lawsuits are often more complicated than others, as are ERISA cases. An attorney who focuses on employment law may be able to answer questions for those who believe they have suffered harm as a result of their employer’s practices. A lawyer may be able to identify potentially-liable parties or gather evidence to build a case to enforce employee rights.