Wells Fargo Directors Must Face Investors’ Foreclosure Disclosure Claims
Directors of Wells Fargo & Co., the largest U.S. mortgage lender, must face investors’ claims the bank failed to properly disclose details of its foreclosure practices to government investigators, a judge ruled.
U.S. District Judge Susan Illston in San Francisco rejected Wells Fargo’s request to dismiss shareholders’ allegations that directors wrongfully failed to disclose their opposition to a government probe of the bank’s mortgage lending and foreclosure policies.
“The fact that the company was allegedly stymieing the government regulators is certainly material to stockholders when considering whether to authorize a more serious internal investigation,” Illston said in Feb. 9 ruling.
That same day, Wells Fargo and four other banks reached a $25 billion settlement with state and federal officials to end a probe of abusive foreclosure practices stemming from the collapse of the U.S. housing bubble.