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MarketScreener Homepage  >  Equities  >  Nyse  >  Wells Fargo & Company    WFC

WELLS FARGO & COMPANY

(WFC)
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Wells Fargo : Former employees file class action against Wells Fargo

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09/24/2016 | 03:02pm EDT
Wells Fargo branch is seen in the Chicago suburb of Evanston Illinois

(Reuters) - Two former Wells Fargo & Co employees have filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired.

The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas.

"Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts," the lawsuit filed on Thursday in California Superior Court in Los Angeles County said.

Wells Fargo has fired some 5,300 employees for opening as many as 2 million accounts in customers' names without their authorization. On Sept. 8, a federal regulator and Los Angeles prosecutor announced a $190 million settlement with Wells.

The revelations are a severe hit to Wells Fargo's reputation. During the financial crisis, the bank trumpeted being a conservative bank in contrast with its rivals.

A Wells Fargo spokesman on Saturday declined to comment on the lawsuit.

The lawsuit accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.

Former employees Alexander Polonsky and Brian Zaghi allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short.

Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.

While executives at the top benefited from the activity, the blame landed on thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so, the lawsuit said.

Employees with a conscience who tried to meet quotas without engaging in fraud were the biggest victims, losing wages, benefits and suffering anxiety, humiliation and embarrassment, the lawsuit said.

Wells Fargo was aware many accounts were illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices, the lawsuit said.

"Wells Fargo knew that their unreasonable quotas were driving these unethical behaviors that were used to fraudulently increase their stock price and benefit the CEO at the expense of the low level employees," the lawsuit said.

(Reporting by David Bailey in Chicago; Editing by Matthew Lewis)

By David Bailey

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Financials (USD)
Sales 2019 84 406 M
EBIT 2019 29 454 M
Net income 2019 19 985 M
Debt 2019 -
Yield 2019 3,79%
P/E ratio 2019 11,2x
P/E ratio 2020 11,6x
Capi. / Sales2019 2,55x
Capi. / Sales2020 2,69x
Capitalization 215 B
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Mean consensus HOLD
Number of Analysts 31
Average target price 50,07  $
Last Close Price 50,46  $
Spread / Highest target 18,9%
Spread / Average Target -0,76%
Spread / Lowest Target -16,8%
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NameTitle
C. Allen Parker President, Chief Executive Officer & Director
Elizabeth A. Duke Independent Chairman
John R. Shrewsberry Chief Financial Officer & Senior Executive VP
Saul van Beurden Head-Technology
Gary Owen Chief Information Security Officer
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