Wells Fargo investor seeks files in probe over fake interviews for diverse candidates

David Paul Morris/Bloomberg

A Florida pension fund is demanding Wells Fargo turn over files about a possible criminal probe into whether the bank violated federal law by setting up fake job interviews to meet in-house diversity guidelines. 

The request in a Delaware lawsuit is tied to reports in The New York Times last year that federal prosecutors are investigating the bank over claims managers in its wealth management division arranged job interviews for black and female candidates for positions that had already been filled.  

Lawyers for the Pompano Beach General Employees Retirement System, which holds Wells Fargo stock, said Monday it wants the files "to investigate possible breaches of fiduciary duty" tied to the fake interviews, according to Delaware Chancery Court filings. 

Wells Fargo officials declined to comment on the fund's document demands, but said the company remains committed to its diversity goals. 

"Our diverse slate guidelines for hiring, which are a best practice across many industries, are intended to, and have contributed to, measurable increases in diverse representation across the company," Laurie Kight, a company spokeswoman, said in an emailed statement.

The bank has been dealing with a series of scandals and regulatory issues for years and is operating under a growth cap imposed by the Federal Reserve. 

In 2020, the San Francisco-based bank paid $3 billion to resolve criminal and civil claims over allegations employees opened millions of savings and checking accounts in the names of actual customers without their knowledge to get bonuses. The bank's former CEO — John Stumpf – was fined $17.5 million for his role in the scandal. 

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The pension fund's complaint over the job interviews is a so-called books and records action, demanding documents that can be used as fodder for suits against Wells Fargo executives or directors for breaching their duties to investors. 

In 2020, Wells Fargo officials launched an effort to beef up diversity in its hiring practices after paying about $8 million to resolve Labor Department claims it discriminated against more than 30,000 Black job applicants for positions in banking, sales and other roles.

But Wells Fargo employees tipped off federal prosecutors last year that managers in the bank's wealth-advisory units were conducting sham interviews to meet internal diversity mandates, according to the Times reports.

The case is Pompano Beach General Employees Retirement System v. Wells Fargo & Co., 2023-0656, Delaware Chancery Court (Wilmington).