NEW YORK - (NewMediaWire) - July 17, 2020 - Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Wells Fargo & Company ("Wells Fargo" or the "Company")(NYSE:WFC) of the August 3, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in Wells Fargo stock or options between April 5, 2020 and May 5, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/WFC. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of all those who purchased Wells Fargo securities between April 5, 2020 and May 5, 2020 (the "Class Period"). The case, Ma v. Wells Fargo & Company et al., No. 20-cv-03697 was filed on June 4, 2020.
On April 5, 2020, Wells Fargo announced that it had received strong interest in the Paycheck Protection Program (“PPP”), a program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and was targeting to distribute a total of $10 billion to small business customers under the requirements of the PPP.
On April 8, 2020, the Federal Reserve announced that it would allow Wells Fargo to exceed the asset cap that it had imposed on Wells Fargo in 2018 after revelations that the Company had opened millions of accounts in customers’ names without their permission, a change which would allow Wells Fargo to make additional small business loans as part of the PPP. That same day, Wells Fargo issued a press release stating, in relevant part, that, “beginning immediately, in response to the actions by the Federal Reserve, [Wells Fargo] will expand its participation in the [PPP] and offer loans to a broader set of its small business and nonprofit customers subject to the terms of the program.”
The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (i) Wells Fargo planned to, and did, improperly allocate government-backed loans under the PPP, and/or had inadequate controls in place to prevent such misallocation; (ii) the foregoing foreseeably increased the Company’s litigation risk with respect to PPP allocation, as well as increased regulatory scrutiny and/or potential enforcement actions; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On April 20, 2020, after at least two lawsuits were filed against Wells Fargo, reports emerged that Wells Fargo may have unfairly allocated government-backed loans under the PPP. Following this news, Wells Fargo’s stock price fell more than 5% over two trading days to close at $26.84 per share on April 21, 2020. Finally, on May 5, 2020, Wells Fargo disclosed in an SEC filing that "it has . . . received formal and informal inquiries from federal and state governmental agencies regarding its offering of PPP loans.”
On this news, Wells Fargo's share price fell from $27.35 per share on May 4, 2020 to a closing price of $25.61 on May 6, 2020: a $1.74 or a 6.36% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Wells Fargo's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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