Lawyers at Beasley Allen have been appointed to the Executive Committee in litigation filed on behalf of Wells Fargo employees claiming that the bank’s fake-account scandal is jeopardizing their retirement accounts. Wells Fargo employees have seen the value of their 401(k) retirement plan plunge during this disaster because the plan is heavily invested in the bank.
“The fake-account fraudulent scheme Wells Fargo imposed on consumers ultimately caused harm to its own employees,” said W. Daniel “Dee” Miles, III, head of Beasley Allen’s Consumer Fraud section. “Many of the same people responsible for the fake-account fraudulent scheme also managed the Employee Benefit plan. Those responsible for the Wells Fargo Plan invested Heavily in Wells Fargo stock on behalf of the plan, despite having knowledge of the fraudulent scheme. When the scheme was revealed the stock tanked, causing harm to Wells Fargo employees who participated in the plan. This class action we’ve filed seeks to rectify that harm to those employees.”
The lawsuit alleges the Wells Fargo fraud violated employees’ rights under the Employee Retirement Income Security Act (ERISA). Wells Fargo’s 401(k) matching funds are in the form of Wells Fargo stock. The lawsuit alleges Wells Fargo hid the truth from its employees and violated fiduciary duties owed to the plan participants.
In September, Wells Fargo agreed to pay the U.S. $185 million in penalties and $5 million to customers it defrauded by pressuring employees to meet sales quotas by opening fake customer accounts. The scheme was so common that it led to the creation of more than two million checking, savings, and credit card accounts using customers’ personal information without their consent. The bank then charged customers fees for maintaining the accounts.
Beasley Allen is one of only six firms appointed to a leadership role in the entire Wells Fargo litigation. There are a number of other lawsuits filed in relation to the fraudulent activities.
• A class action was filed on behalf of consumers against Wells Fargo for opening unauthorized accounts, and the Los Angeles City Attorney filed a complaint as well. Another class action was filed in Utah District Court on behalf of consumers who were victims of the Wells Fargo scheme. The 2015 cases settled, but the consumer case in Utah is still ongoing.
• Another set of cases brought by Wells Fargo employees deal with employees who were fired or demoted over the last 10 years for refusing to open bogus accounts to meet Wells Fargo’s aggressive sales goals.
• Wells Fargo shareholders filed suit in California alleging Wells Fargo misled investors about its financial performance and the success of its sales strategies causing stock to trade at inflated prices. The suit alleges violations of the 1934 Securities and Exchange Act, including allegations of insider trading.
The ERISA lawsuit was filed by Beasley Allen Crow Methvin Portis & Miles P.C., along with Lockridge Grindal Nauen PLLP, Grant & Eisenhofer P.A., and Elias Gutzler Spicer LLC. The case is Allen v. Wells Fargo , D. Minn., No. 0:16-cv-03405, complaint filed Oct. 7 in the United States District Court for the District of Minnesota.