Wells Fargo employees in the Houston area may have lost money in their retirement plans after stock prices in the bank declined. Employees who allege that Wells Fargo violated the Employee Retirement Income Security Act have filed several complaints against the bank. The plaintiffs are seeking class action status for their ERISA claims.
According to the complaints, Well Fargo executives knew that the bank’s stock price was inflated because of illegal sales procedures. Executives who oversaw the company’s retirement plan continued to offer Wells Fargo stock as an investment option even though they knew that the stock was not a good investment. The plaintiffs allege that Wells Fargo executives should have dropped the stock from its retirement plan, and doing so would not have violated insider trading laws.
Wells Fargo is accused of requiring low-level banking professionals to engage in aggressive sales tactics. As a direct result of the sales requirement, millions of unauthorized customer accounts were opened. After the illegal practices were disclosed, the value of Wells Fargo stock fell by 12 to 15 percent, and Wells Fargo is now facing almost $200 million in civil penalties.
Current or retired Wells Fargo employees who believe that their retirement plan was damaged by ERISA violations may want to talk to an attorney about joining a class action lawsuit against the bank. This may be more practical then filing an individual lawsuit. Although there is no guarantee, of course, it is likely that the case will be settled before it reaches the trial stage.
Source: Planadviser.com, “Third Wells Fargo ERISA Stock Drop Complaint Filed,” John Manganaro, Oct. 25, 2016