Wells Fargo: Shareholders Can't Sue Us Because They Should Have Known We Were Lying

Submitted by: daegog 2 months ago in News & Politics


They might have a case.

An excerpt from MPA Mag: Wells Fargo is adopting an unusual defense against a shareholder lawsuit: claiming, essentially, that shareholders can’t hold the bank accountable for CEO Tim Sloan’s statements that it was “working to restore trust” and be “more transparent” about its scandals – because it should have been obvious that Sloan was lying.

The defense, which Wells Fargo put forth in a legal filing aimed at getting a shareholder lawsuit dismissed, relies on the legal concept of “puffery,” according to a Los Angeles Times report.

Generally, businesses engage in “puffery” when they make advertising claims that are vague or transparently untrue – a restaurant claiming it has “the world’s best burgers,” for instance. Judges and regulators have ruled that claims like that are so obviously inflated that consumers won’t take them seriously. Such claims aren’t actionable in court, the Times reported.

The thing is, “puffery” usually applies to outsized advertising claims. Wells Fargo is now claiming that the “puffery” defense should be applied to statements CEO Tim Sloan made to investors, and that a lawsuit filed by shareholders should be dismissed on those grounds.

The lawsuit stems from one of the bank’s many scandals – in particular the July 2017 revelation that Wells Fargo had for years been charging auto loan customers for unnecessary insurance. The lawsuit is seeking class certification for all investors who bought the company’s stock after Nov. 3, 2016, through Aug. 3, 2018, the Times reported.

It was on Nov. 3, 2016, that Sloan announced at an investor’s conference that he was “not aware” of any undisclosed scandals. In fact, Wells Fargo already knew that its improper auto insurance charges had pushed as many as 275,000 customers into delinquency and resulted in 25,000 improper repossessions. In fact, top bank executives allegedly knew of the problem as early as 2012, but took no action until 2016, according to the Times. Regulators have already slammed the bank for its inaction; earlier this year, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency fined Wells Fargo $1 billion for the auto-insurance scandal and a rash of improper mortgage fees.

The shareholder lawsuit focuses on efforts by Sloan and other Wells Fargo executives to conceal the auto-loan scandal, the Times reported. Wells Fargo execs were, at the time, already dealing with the bank’s massive fake-accounts scandal. They insisted that Wells Fargo would be “more transparent” about its scandals even while failing to disclose the auto-insurance issue.
There are 8 comments:
Male 794
I learned my lesson from Bank of America 30 some years ago, no big banks! Credit Union ever since!
0
Reply
Male 364
Ill give those Wells Fargo fucks some puffery.
1
Reply
Male 1,867
i believe about 20 of these wells fargo managers need to spend some quality time in federal azz pounding prison
1
Reply
295
One of the worst banks out there, along with bank of America and a couple others.  Occasionally, working in the insurance industry, I had to write checks to both our named insured and their mortgageholder.  The megabanks didn't give a damn about signing off on the checks, so the insureds were left holding these worthless checks that they couldn't use because their shitty banks wouldn't sign off on them and oftentimes didn't even know who was supposed to sign off on them.
1
Reply
Male 2,345
Wells Fargo's new theme song.
1
Reply
Female 9,819
And this is why I only do local credit unions. 
0
Reply
Male 2,850
Don't do business with a mega bank....ever.
0
Reply
Male 4,069
Did any of the victims receive a dime of that 1 billion?
Heck no.
Any Wells Fargo bigshots arrested or tried for racketeering and other crimes?
Heck no.
Any federal government agencies make out like bandits with that 1 billion?
You betcha.
And that's the game, folks.
Corporations steal, government 'taxes' the theft, and the citizenry gets screwed. 
1
Reply