Wells Fargo settles fake DEI job interview claims in class-action suit for $85M
Banking giant Wells Fargo has agreed to pay $85 million to settle a three-year class-action legal battle in California over claims that it held fake job interviews to meet diversity targets.
The suit claimed that from February 2021 to June 2022, interviews with diverse candidates were “shams,” often held even though another candidate had already been selected for the role. The lawsuit was filed by investors in June 2022 in the U.S. District Court for the Northern District of California.
Investors took action against Wells Fargo with a class-action after stock prices dropped following media reports about the interviews.
The settlement motion was disclosed last week in a federal court filing in San Francisco, the headquarters for Wells Fargo. The bank has denied the claims, and said it settled to avoid the burden, expense, and uncertainty of continued litigation.
Wells Fargo has its largest employment hub in Charlotte, with approximately 27,000 employees.
About the Wells Fargo DEI lawsuit
Stockholm-based SEB Investment Management AB, on behalf of other plaintiffs, claimed that Wells Fargo and its executives violated securities laws by making false and misleading statements about its diverse search requirement for higher-paying jobs, according to court records.
For all U.S. job openings paying $100,000 or more annually, Wells Fargo mandated that at least half of the candidates come from a diverse background, The Charlotte Observer previously reported. This included underrepresented racial or ethnic minorities, women, veterans, LGBTQ individuals, and people with disabilities.
The Securities and Exchange Commission looked into the bank’s hiring practices in 2022, according to The Charlotte Observer.
In 2023, a federal judge in California refused to dismiss the class-action suit against the bank. At that time, Wells Fargo stated that it was committed to diversity, equity and inclusion and did not allow discrimination in its operations.
To resolve the class-action case, the bank and the plaintiffs accepted a mediator’s recommendation on Sept. 22 and notified the court a few days later. A formal motion for settlement was filed on Oct. 15, concluding several years of back-and-forth litigation.
The $85 million settlement fund will be distributed to qualified class members after deductions for fees, expenses and taxes. Based on the maximum estimate from the plaintiffs’ damages expert of class-wide damages of $1 billion to $2 billion, the settlement represents between 4.25% and 8.5% of that financial exposure, according to the suit.
Class members who submit valid claims will receive funds from the settlement, with the distribution formula prioritizing those who owned Wells Fargo stock during the period covered by the lawsuit.
Payments will go to shareholders who held company stock between Feb. 24, 2021, and June 9, 2022. In just two days, the company’s stock price fell by 10% after the news surfaced about the interviews in May 2022, resulting in a loss of $17 billion in market value, according to court documents.
Claims administrator A.B. Data Ltd. estimates that a total of approximately 775,000 postcard notices will be mailed for the settlement.
The amount each class member will receive in this case cannot be determined yet and will depend on several factors, such as deductions for attorney fees, documented losses and the total number of valid claims filed.
The plaintiffs’ lawyers plan to seek up to 25% of the settlement for their fees, plus up to $3.5 million to cover their expenses.
A hearing for initial approval to the settlement is scheduled for Feb. 10, 2026. However, since no one is objecting to the request, the judge may make a ruling just by reviewing the written documents, without holding the hearing.
“We are pleased to have reached a settlement,” Wells Fargo said in a statement. The plaintiffs’ attorneys did not respond to requests for comment from The Charlotte Observer.
More on Wells Fargo and DEI
Wells Fargo reported to the SEC in 2024 that 46% of its 238,000 employees were from diverse racial and ethnic backgrounds and stated its commitment to advancing diversity.
But in a filing this year, the bank changed its language. This shift followed President Donald Trump’s January executive order against DEI efforts and amid growing public criticism.
The Charlotte Observer found that Wells Fargo was among seven of the nine largest public companies in Charlotte that stopped mentioning diversity and equity in these reports.
This story was originally published October 21, 2025 at 5:35 AM.
