US bank Wells Fargo is facing a lawsuit claiming it defrauded shareholders by conducting ‘sham interviews’ for non-white and female applicants as part of a public commitment to increasing diversity.
A San Francisco judge dismissed a first attempt with this lawsuit last year, saying there was insufficient evidence to show that the fake interviews were widespread or even took place.
A shareholder group is now citing interviews with former employees, an internal whistleblower email, and the “sudden retirement” of a senior wealth manager who is alleged to have encouraged a colleague to conduct the fake interviews, according to a report by Reuters.
Diversity and inclusion
The shareholders refute 11 statements by the fourth largest US bank that its diversity policy, adopted in March 2020, led to at least 50% of interviewees for $100,000+ roles being from ethnic minorities, females, or from other disadvantaged groups.
District Judge Trina Thompson wrote: “The employee-submitted complaints, the peculiar timing of [the manager’s] departure, and defendants’ demonstrated focus on diversity issues supports a strong inference of [fraudulent intent] that is cogent and at least as compelling as an opposing inference that defendants remained oblivious.”
Wells Fargo attracted controversy in June when it was accused of making a wave of redundancies of employees who were “faking” keyboard movements to make it look like they were working.
In a statement, the bank said it would continue to defend the lawsuit, noting that the US Securities and Exchange Commission had closed investigations into its hiring practices in 2022.
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