October 24th 2025.
After three years of legal battles, Wells Fargo has reached a settlement of $85 million in a lawsuit that accused them of conducting fake interviews in order to meet diversity, equity, and inclusion hiring quotas. According to The Charlotte Observer, the financial institution was accused of holding interviews for diverse candidates between February 2021 and June 2022 without any intention of actually hiring them. This led to a class action lawsuit being filed in the U.S. District Court for the Northern District of California.
The lawsuit also claimed that after news of these "sham" interviews broke in May 2022, Wells Fargo's stock prices plummeted, resulting in an investor lawsuit. The plaintiffs, represented by investment firm SEB Investment Management AB, accused the bank and its executive team of violating securities laws by making false and misleading statements about their diversity requirements for higher-paying jobs. The bank, on the other hand, stated that almost half of the candidates they interviewed for U.S.-based roles paying $100,000 or more per year were from underrepresented demographics, including minorities, women, veterans, LGBTQ individuals, and people with disabilities.
While Wells Fargo denied the accusations and claimed that the settlement was simply to avoid further expenses and litigation, it shed light on the bank's diversity practices. In 2024, the Securities and Exchange Commission received a report from Wells Fargo stating that 46% of their 238,000 employees were from diverse backgrounds, and that they remained committed to further advancing their diversity stance. However, when President Donald Trump signed an executive order opposing diversity, equity, and inclusion efforts, the bank, along with many other leading corporations, scaled back their efforts. This was reflected in their SEC reports, where references to diversity and equity were noticeably absent.
The $85 million settlement will be distributed among eligible class action members after deducting fees, expenses, and taxes. Those who owned Wells Fargo stock during the period of the lawsuit will be given priority in receiving settlement payments, with shareholders who held stock between February 24, 2021, and June 9, 2022, receiving payments due to the 10% decrease in Wells Fargo's stock price after news of the fake interviews surfaced. This resulted in the company losing $17 billion in market value.
The bank has also settled another related lawsuit, which accused bank executives of breaching their fiduciary duties by making misleading statements about their diverse hiring practices. As part of this settlement, Wells Fargo has agreed to set aside $100 million to fund mortgage assistance programs for low- and moderate-income borrowers, including those living in or purchasing property in low- and moderate-income areas.
It's worth noting that this settlement comes after Wells Fargo quietly removed a page from their website detailing their long history of diversity. This raises questions about the sincerity of the bank's commitment to diversity, equity, and inclusion. However, the $185 million in settlements and funding for mortgage assistance programs is a step in the right direction for the bank to address the harm caused by their actions.
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