NEW YORK, Nov. 03, 2020 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Wells Fargo & Company (“Wells Fargo” or the “Company”) (NYSE: WFC) in the United States District Court for the Northern District of California on behalf of those who purchased or acquired the securities of Wells Fargo between October 13, 2017 and October 13, 2020, inclusive (the “Class Period”). The lawsuit seeks to recover damages for Wells Fargo investors under the federal securities laws.
The Complaint alleges that Defendants made false and misleading statements and/or failed to disclose adverse information regarding Wells Fargo’s business and operations. Defendants reassured investors that Wells Fargo’s commercial credit portfolios were of exceptional credit quality and the product of robust, industry-leading underwriting and due diligence policies and procedures. In truth, however, Wells Fargo fueled its rapid commercial loan growth by lending to businesses that posed a heightened risk of default. Wells Fargo systematically concealed these credit risks by artificially inflating the incomes generated by borrowing businesses, relaxing or failing to follow applicable underwriting procedures, and circumventing applicable risk controls. Wells Fargo exacerbated the threat posed by its defective commercial debt by packaging the loans into CLOs and CMBS and widely distributing these securitized products throughout the financial system.
On April 14, 2020, in connection with the release of its first quarter 2020 financial results, Wells Fargo revealed it was taking a massive $4 billion provision expense to account for expected credit delinquencies. On this news, the price of Wells Fargo stock fell 14% over three trading days. On July 14, 2020, Wells Fargo released its second quarter 2020 results, which disclosed that the Company had suffered a $2.4 billion loss during the quarter, or ($0.66) per share, and was taking a $9.5 billion provision expense to account for expected credit delinquencies. On this news, the price of Wells Fargo stock fell 5% to $24.25 per share.
Then, on October 14, 2020, Wells Fargo released its third quarter 2020 results, with the Company announcing that it had recognized another provision expense of $769 million and that non-accrual loans had increased $2.5 billion, or 45%, to $8 billion during the quarter. The price of Wells Fargo stock fell 6% on this news to close at $23.25 per share on October 14, 2020.
Investors who purchased or otherwise acquired shares of Wells Fargo during the Class Period should contact the Firm prior to the December 29, 2020 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.