Diversity

Wells Fargo's $85M Diverse-Slate Settlement Pays Stock Buyers, Not Candidates

Wells Fargo agreed to pay $85 million to settle a securities case over its diverse slate hiring statements. The class is stock buyers, not job applicants.

By The WokeCorp Team October 9, 2026 Updated October 14, 2026

The four-question framework

Every corporate commitment runs through the same four filters. Methodology.

What did they commit to?: In its 2020 Annual Report, released February 23, 2021, Wells Fargo stated in the CEO letter, under the heading "Diversity, Equity, and Inclusion," that in the United States it was "requiring a diverse slate of candidates" along with "a diverse interview team" for most roles with total direct compensation of "more than $100,000 per year." Its March 2021 proxy statement repeated that sentence and called the initiative the Diverse Search Requirement. In 2022 the company referred to it as its diverse candidate slate guidelines.
What policy changed internally?: The March 2021 proxy statement says the Diverse Search Requirement required, for most US roles with total direct compensation above $100,000, that at least 50% of interview candidates be diverse with respect to at least one dimension (race/ethnicity, gender, LGBTQ, veterans, and people with disabilities), and that at least one interviewer represent one of those dimensions. Plaintiffs alleged the requirement was administered in a way that produced widespread "fake" interviews of diverse candidates who had no real chance at the job or whose job had already gone to someone else. Wells Fargo paused the guidelines in June 2022, completed a review, and announced on August 1, 2022 that it would resume them effective August 19 with changes.
Where did the money go?: Wells Fargo agreed to pay $85,000,000 in cash without admitting liability, and the money was deposited into escrow on December 5, 2025. The court awarded class counsel 25 percent of the fund, $21,250,000, about a 1.04 multiplier on the lodestar for roughly 36,000 billed hours, plus litigation costs not to exceed $3,077,729.33. It approved an $18,000 class representative award to SEB, reducing the $31,774.66 requested, and a $4,975 service award to West Palm Beach Firefighters' Pension Fund. Administration costs were capped at $1,200,000. The claims administrator estimates the Net Settlement Fund at roughly $60 million at distribution, including interest. Plaintiffs' damages expert estimated that about 1,512 million shares may have been affected, for an estimated average recovery of $0.056 per eligible share before fees and costs.
What are the measurable outcomes?: On May 21, 2026, Judge Trina L. Thompson of the Northern District of California granted final approval of the settlement in SEB Investment Management AB v. Wells Fargo & Company, Case No. 3:22-cv-03811-TLT, and entered a separate final judgment on September 11, 2026. No class member objected. Wells Fargo's Form 10-Q for the quarter ended June 30, 2026 confirms the approval and states that the Department of Justice and the SEC "have since closed their investigations without taking action." A related shareholder derivative lawsuit received final approval of its settlement on May 15, 2026. As of August 6, 2026, the claims administrator had received 642,893 claims, and the motion to distribute the fund is due January 15, 2027. No court has found Wells Fargo liable on any of these claims.

Rounded, colonnaded Beaux-Arts bank building on a San Francisco street corner, with American and California flags on its facade and high-rises behind it — Wells Fargo's branch at 1 Montgomery Street, San Francisco, photographed by Carol M. Highsmith between 1980 and 2006. The securities case over the bank's diverse slate statements was heard and settled in the same city. *· Photo: Carol M. Highsmith, Library of Congress. No known restrictions.*

Wells Fargo agreed to pay $85 million to settle a lawsuit over what it told investors about its diverse slate policy. What is left after legal fees and costs is going to people who bought its stock.

That distinction is the entire story. SEB Investment Management AB v. Wells Fargo & Company was a case under the federal securities laws, not an employment discrimination case under Title VII. The class is the people and entities that bought Wells Fargo common stock between February 24, 2021 and June 9, 2022 and were damaged by it. The alleged injury was an inflated share price. The alleged wrong was a run of public statements, starting with one in an annual report, that plaintiffs said did not match what was happening in the hiring pipeline.

The candidates who allegedly sat through interviews for jobs already filled are not a class in this case. Nothing in the settlement compensates them for those interviews.

Key findings

Judge Trina L. Thompson granted final approval on May 21, 2026 in Case No. 3:22-cv-03811-TLT, Northern District of California, and entered final judgment on September 11, 2026. Wells Fargo’s own Form 10-Q for the quarter ended June 30, 2026 confirms the approval date and the $85 million figure.
The certified class is purchasers of Wells Fargo common stock from February 24, 2021 through June 9, 2022, inclusive. That start date is the day after the 2020 Annual Report was released.
The first of the eleven statements plaintiffs challenged is from that report: the bank said it was “requiring a diverse slate of candidates” and “a diverse interview team” for most US roles paying “more than $100,000 per year.”
Plaintiffs alleged the requirement was run in a way that produced widespread “fake” interviews, and that a New York Times report on June 9, 2022 was the corrective disclosure. The plan of allocation times that disclosure at 2:02 p.m. Eastern.
Wells Fargo denies all allegations of wrongdoing and settled without admitting liability. No court has found the bank liable.
The Department of Justice and the SEC both looked into the hiring practices. Both closed their investigations without taking action, per the bank’s 10-Q.
Of the $85 million, the court awarded class counsel $21,250,000, and the claims administrator estimates roughly $60 million, with interest, is left for the class. None of it has reached class members yet: the motion to distribute the fund is due January 15, 2027.

The first of eleven statements

Securities cases turn on specific statements. The 2020 Annual Report went out on February 23, 2021, with the slate sentence in the CEO letter under the heading “Diversity, Equity, and Inclusion.” The class period opens February 24. On the plaintiffs’ theory, everything the class bought from then on was bought at a price supported, in part, by claims about how the bank filled jobs. The court’s July 2024 order counted eleven challenged statements through June 9, 2022, the second being the same sentence repeated in the March 2021 proxy statement.

Phillip Burton Federal Building, a tall gridded office tower, seen across a San Francisco intersection with a cyclist in the crosswalk — The Phillip Burton Federal Building and U.S. Courthouse at 450 Golden Gate Avenue, San Francisco, where Judge Trina L. Thompson’s courtroom is on the 19th floor. She dismissed the consolidated complaint in 2023 with leave to amend; the amended complaint survived in July 2024, and she approved the settlement on May 21, 2026. *Photo: Marincyclist via Wikimedia Commons. CC BY-SA 4.0.*

Note what the sentence does not say. It makes no promise about outcomes and no forecast of how many diverse candidates would be hired. It says the bank was requiring something. Plaintiffs alleged that requirement was being satisfied by interviews that were not real interviews, which would make the description of the practice misleading rather than merely optimistic.

That theory did not survive on the first try. In August 2023 Judge Thompson dismissed the consolidated complaint, writing that plaintiffs “must allege more than isolated incidents” to support their claim that the statements were misleading because of widespread sham interviews. The amended complaint added accounts from former employees across several states and business lines, and in July 2024 the court held that plaintiffs had sufficiently pleaded falsity.

The case then went most of the way to trial. Per the court’s final approval order, plaintiffs conducted or defended 25 depositions, analyzed more than 620,000 pages of documents, and briefed two motions to dismiss, class certification, summary judgment, and Daubert motions. Both sides accepted a mediator’s recommendation of $85 million on September 22, 2025, about six months before a trial set for March 16, 2026.

Why the securities framing changes the incentives

An employment discrimination claim asks whether a specific applicant was treated unlawfully. It is individualized and capped by what one person lost. A securities claim asks whether the market paid too much because of something the company said. It aggregates automatically across every share traded in the window.

Plaintiffs’ damages expert estimated that roughly 1,512 million shares bought during the class period may have been affected. The same expert put the class’s maximum recoverable damages at roughly $1 billion to $2 billion, which makes the $85 million settlement about 4.25 to 8.5 percent of that range.

LED market data board showing rows of share prices in green and red — A generic market data board; these are not Wells Fargo prices. The plan of allocation prices the alleged corrective disclosure per share: $0.76 of alleged inflation removed on June 9, 2022 after 2:02 p.m. Eastern, $1.52 across June 9 and 10 combined, against a June 9 close of $42.67. Recovery is computed per share bought, not per person affected by the hiring practice. *Photo: Pixabay via Pexels. Pexels License.*

That is how a dispute over a hiring policy produced a ten-figure damages estimate and an eight-figure settlement while the people who allegedly sat for the interviews are absent from the caption. Securities law protects the buyer of the stock. It was not built to protect the candidate in the conference room, and here it did not.

For a general counsel reading the docket, the lesson we draw is narrow and uncomfortable: the legal exposure attached to the description of the program, not to the program. By our reading, a bank that ran the same policy the same way and never described it to investors would not have had this class period.

What Wells Fargo says, and what the regulators did

The bank denies the claims. According to the settlement notice, the defendants deny “any wrongdoing or violation of law of any kind whatsoever,” agreed to settle to eliminate the burden and expense of continued litigation, and the settlement may not be construed as an admission of wrongdoing.

Two facts belong alongside the headline number, and they cut in Wells Fargo’s favor. The Department of Justice and the SEC each looked at the hiring practices, and per the bank’s July 2026 quarterly filing, both “closed their investigations without taking action.” The final approval order says the same in its own words: neither agency brought charges or claims. A criminal or regulatory finding would have been a much heavier fact than a negotiated civil settlement, and neither arrived.

Glass-fronted headquarters of the U.S. Securities and Exchange Commission in Washington with three flagpoles at the entrance — SEC headquarters at 100 F Street NE, Washington, photographed in 2009. Wells Fargo’s July 2026 quarterly filing says the SEC and the Justice Department both investigated its diversity hiring practices and closed those investigations without taking action. *Photo: AgnosticPreachersKid via Wikimedia Commons. CC BY-SA 3.0.*

Wells Fargo’s public account of the policy moved quickly in 2022. On June 9, the day of the Times report, the bank said no one should be interviewed “without a real chance of receiving an offer, period,” and that it had temporarily paused the guidelines earlier that week. On August 1 it said it would resume them on August 19, still expecting a 50% diverse candidate slate, but scoping roles by job level rather than compensation and adding manager and recruiter review of exceptions.

It is also worth being precise about what a settlement is. Class counsel litigated on a wholly contingent basis, billed roughly 36,000 hours, and was awarded 25 percent of the fund, which the court calculated as about a 1.04 multiplier on its lodestar. The order set that beside multipliers of 1.41 to 2.5 approved in other Northern District securities cases. By our reading, that is a court pricing the work, not rewarding a windfall. No class member objected, and the judge still cut lead plaintiff SEB’s requested award from $31,774.66 to $18,000.

The money has not moved yet. The full $85 million went into escrow on December 5, 2025. By the claims administrator’s August 6, 2026 report, 642,893 claims had come in and 362,427 were provisionally valid, for an estimated average of $1,001.89 per eligible class member, a figure the administrator expects to change as review continues. The court entered final judgment on September 11, 2026, and the motion to distribute the fund is due January 15, 2027.

Row of three empty white plastic waiting-room chairs with an attached side table against a white wall — Empty waiting-room chairs. The people at the center of the alleged conduct, candidates brought in for interviews that plaintiffs said were for jobs already decided, are not the settlement class and recover nothing in this case as candidates. *Photo: Jan van der Wolf via Pexels. Pexels License.*

The WokeCorp assessment

The policy and the disclosure were two different things. The class action’s claims arose under Sections 10(b) and 20(a) of the Exchange Act; none asked a court to rule on whether a diverse-slate requirement is lawful. It attacked the description of that requirement in documents investors relied on. Wells Fargo itself called diverse slates “a common, good practice across multiple industries” when it reinstated them in August 2022. Companies that conflate the program with the description will draw the wrong lesson.

The wrong lesson is silence. A bank that stops saying anything about how it hires cannot be sued for saying it inaccurately. That outcome is cheaper for the company and worse for everyone trying to evaluate it, and in our view it is the predictable response to an $85 million line item attached to statements about a hiring program.

The candidates are still missing from this. The alleged conduct that started the sequence, people brought in to interview for jobs that were already decided, has produced no recovery in this case for the people it happened to. An estimated $0.056 per share, before fees, going to the buyers of the stock is the market’s answer to a question about dignity, and it is not a good one.

The SEC’s ESG Greenwashing Enforcement Fines, the same disclosure-liability mechanism applied to climate claims
Greenhushing and the South Pole Survey, what happens when companies decide silence is safer
The Great DEI Retreat of 2024-2025, the corporate rollback wave
Goldman Sachs and the Board Diversity IPO Rule, another diversity commitment with a compliance mechanism attached

Sources

Order Granting the Motion for Final Approval of Settlement and Plan of Allocation, and Granting, as Modified, Motion for Attorneys’ Fees and Litigation Expenses, ECF 284, filed 05/21/26, SEB Investment Management AB v. Wells Fargo & Company, No. 3:22-cv-03811-TLT (N.D. Cal.). Verified 2026-10-09.
Judgment, ECF 289, filed 09/11/26. Verified 2026-10-09.
Status Report Regarding Administration of Settlement and Declaration of Kathleen Brauns, ECF 286, filed 08/06/26. Verified 2026-10-09.
Notice of Proposed Settlement, Settlement Hearing, and Motion for Attorneys’ Fees, with Plan of Allocation, wellsfargosecuritiesaction.com. Verified 2026-10-09.
Plaintiffs’ Motion for Final Approval of Settlement and Plan of Allocation, ECF 271. Verified 2026-10-09.
Amended Complaint for Violations of the Federal Securities Laws, ECF 116, filed 09/08/23. Verified 2026-10-09.
Order Granting Motion to Dismiss, ECF 112, August 18, 2023, and Order Denying Motion to Dismiss Amended Complaint, ECF 150, July 29, 2024, via CourtListener. Verified 2026-10-09.
Docket, SEB Investment Management AB v. Wells Fargo & Company, 3:22-cv-03811, CourtListener. Verified 2026-10-09.
Wells Fargo & Company, Form 10-Q for the quarter ended June 30, 2026, Legal Actions note, “Hiring Practices Matters.” Verified 2026-10-09.
Wells Fargo & Company, 2020 Annual Report, CEO letter. Verified 2026-10-09.
Wells Fargo & Company, 2021 Proxy Statement, filed March 16, 2021. Verified 2026-10-09.
Wells Fargo, “Wells Fargo response to New York Times article,” June 9, 2022. Verified 2026-10-09.
Wells Fargo, “Wells Fargo Completes Comprehensive Review of Diverse Candidate Slate Guidelines,” August 1, 2022. Verified 2026-10-09.