Wells Fargo will pay $85M to settle claim alleging ‘sham’ diversity hiring practices

Wells Fargo has agreed to pay $85 million to settle a lawsuit alleging it engaged in “sham” diversity hiring practices, according to court documents filed Oct. 15.

According to the 2022 lawsuit, SEB Investment Management AB, et al., v. Wells Fargo & Co., the company maintained a policy requiring diverse candidate slates for certain open roles. However, hiring managers brought in candidates for roles that were already filled, or were not qualified for the position for which they were applying, the lawsuit alleged.

The bank also agreed to settle a related lawsuit, In re Wells Fargo & Co. Hiring Practices Derivative Litigation, that alleged executives breached their fiduciary duties by making false or misleading statements about the company’s diverse hiring practices.

To resolve that claim, the bank agreed to set aside $100 million to fund mortgage assistance programs to benefit low- and moderate-income borrowers or borrowers currently residing in or purchasing property in low- and moderate-income census tracts to resolve similar claims, according to court documents filed Oct. 13.