'Misleading investors' | Wells Fargo settles lawsuit over 'sham' DEI interviews

Wells Fargo and its investors have reached an agreement to resolve a federal class-action lawsuit claiming the bank staged sham interviews tied to its diversity, equity and inclusion policies.

According to a Sept. 15 filing in US District Court for the Northern District of California, the settlement terms are being finalized and will be presented to the court by Oct. 13. A hearing has been requested for mid-November to confirm the agreement “in principle.”

The lawsuit alleged that from February 2021 through June 2022, Wells Fargo held interviews with diverse candidates for high-paying roles despite those jobs already being filled.

SEB Investment Management AB filed the original complaint in September 2022 on behalf of shareholders. It accused the bank of misleading investors about its efforts to broaden representation across senior roles.

Bank denies wrongdoing but revises DEI approach

Wells Fargo rejected the claims, saying it “does not tolerate discrimination in any part of our business.” In a statement, the bank added that both the Department of Justice and the Securities and Exchange Commission reviewed the allegations but closed their investigations without action.

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It was reported that Wells Fargo required half of candidates for US roles paying $100,000 or more to be drawn from underrepresented groups, including women, veterans, LGBTQ individuals, people with disabilities, and racial or ethnic minorities.

A judge dismissed Wells Fargo’s bid to throw out the case last year. Since then, the bank has maintained that it remains committed to diversity initiatives.

In its 2024 diversity report, Wells Fargo said 46% of its 238,000 employees were racially or ethnically diverse. Yet references to diversity and equity were removed from its most recent SEC filings, reflecting a broader trend among large Charlotte-based public companies after President Trump signed an executive order targeting DEI programs in January.

Seven of the nine largest publicly traded firms in the region followed suit, according to the Observer. Wells Fargo eliminated its “Pay Equity Review” and DEI-related language in its 10-K filing, though its website still promotes an “Inclusion and Accessibility” agenda.

The San Francisco-headquartered bank employs about 27,000 people in Charlotte, its largest employment hub.