PR Newswire
NEW YORK, Nov. 14, 2020 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against Wells Fargo & Company (“Wells Fargo” or the “Company”) (NYSE: WFC) and certain of its officers. The class action, filed in United States District Court for the Northern District of California and docketed under 20-cv-07997, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired Wells Fargo securities between October 13, 2017 and October 13, 2020, inclusive (the “Class Period”). Plaintiff seeks to pursue remedies against Wells Fargo and certain of the Company’s current and former senior executives under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Wells Fargo securities during the Class Period, you have until December 29, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Wells Fargo is a global financial services company headquartered in San Francisco, California. The Company provides banking, investment and mortgage products and services, as well as other consumer and commercial financial services. It is one of the largest banks in the world as measured by both market capitalization and total assets.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Wells Fargo had systematically failed to follow appropriate underwriting standards and due diligence guidelines in issuing billions of dollars’ worth of commercial loans, including by inflating the net income and future expected cash flows of its commercial clients to justify issuing excessive loan amounts; (ii) a materially higher proportion of Wells Fargo’s commercial loan customers were of poor credit quality and/or at a substantially higher risk of default than disclosed to investors; (iii) Wells Fargo had failed to timely write down commercial loans, collateralized loan obligations (“CLOs”) and commercial mortgage backed securities (“CMBS”) on its books that had suffered impairments; (iv) Wells Fargo had materially understated the reserves needed for expected credit losses in its commercial portfolios; (v) Wells Fargo had systematically misrepresented the credit quality and likelihood of default of the loans it packaged and securitized into CLOs and CMBS, including by artificially inflating the net income and expected cash flows of its commercial clients in loan and securitization documentation; (vi) the CLO and CMBS-related loans issued and investment securities held by Wells Fargo were of lower credit quality and worth far less than represented to investors; (vii) as a result of (i)-(vi) above, Wells Fargo’s Class Period statements regarding the credit quality of its commercial loans, its underwriting and due diligence practices, and the value of its CLO and CMBS books were materially false and misleading; and (viii) as a result of all the foregoing, Wells Fargo was exposed to severe undisclosed risks of financial, reputational and legal harm, in particular in the event of significant and sustained stress in the commercial credit markets.
On April 14, 2020, Wells Fargo issued a press release providing its results for the first quarter of 2020. The release revealed a stunning deterioration in the Company’s credit portfolio, particularly with respect to its commercial loans.
On this news, Wells Fargo’s stock price fell 14% over the following three trading sessions, closing at $26.89 per share on April 16, 2020.
Then, on May 5, 2020, Wells Fargo filed its quarterly report for the first quarter with the SEC, which stated that the fair value of the Company’s CLO investments held-for-sale had fallen to $26.9 billion by the quarter’s end, a 9% decline from the end of the quarter and year ended December 31, 2019 (“FY19”), and that Wells Fargo had suffered $1.7 billion in unrealized losses on its CLO investments during the quarter.
On this news, Wells Fargo’s stock price fell another 6% over two trading days to close at $25.61 per share on May 6, 2020.
Then, on June 10, 2020, Wells Fargo’s Chief Financial Officer John Shrewsberry (“Shrewsberry”) presented at the Morgan Stanley Virtual US Financials Conference. During the conference, Shrewsberry revealed that Wells Fargo’s second quarter reserve build would be even “bigger than the first quarter” as a result of continued deterioration in the Company’s credit portfolio.
On this news, Wells Fargo’s stock price fell 18% over two trading days to close at $26.79 per share on June 11, 2020.
On July 14, 2020, Wells Fargo issued a release providing its results for the second quarter of 2020. The release stated that Wells Fargo had suffered a $2.4 billion loss during the quarter, or ($0.66) per share, largely as a result of deterioration in its commercial credit portfolio.
On this news, Wells Fargo’s stock price fell another 5% to close at $24.25 per share on July 14, 2020.
Finally, on October 14, 2020, Wells Fargo issued a release providing its results for the third quarter of 2020. The release stated that Wells Fargo had recognized another provision expense of $769 million and that non-accrual loans had increased $2.5 billion, or 45%, to $8 billion during the quarter.
On this news, Wells Fargo’s stock price fell another 6% to close at $23.25 per share on October 14, 2020.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP
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