Wells Fargo wins dismissal of shareholder lawsuit

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FE Team | Published: May 07, 2022 21:41:34

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U.S. District Judge William Alsup in San Francisco said shareholders failed to adequately allege that Wells Fargo unjustifiably inflated the quality of its loans, understated loss reserves or misstated its lending practices. Shareholders claimed to have lost billions of dollars in Wells Fargo stock as the San Francisco-based bank in 2020 gradually revealed the "previously unknown level of risk" in its commercial loans. The proposed class covers shareholders in the three years ending October 13, 2020, a period when Wells Fargo's share price fell 54 per cent. But the judge concluded that Wells Fargo had underwriting standards that "proved largely accurate or conservative, not inflationary,".
— Reuters