BENSALEM, Pa., Nov. 23, 2020 /PRNewswire/ --
Law Offices of Howard G. Smith reminds investors of the upcoming December 29, 2020 deadline to file a lead plaintiff motion in the case filed on behalf of investors who purchased Wells Fargo & Company ("Wells Fargo" or the "Company") (NYSE: WFC) common stock between October 13, 2017 and October 13, 2020, inclusive (the "Class Period").
Investors suffering losses on their Wells Fargo investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to [email protected].
On April 14, 2020, Wells Fargo announced its first quarter 2020 financial results in a press release. Therein, the Company announced a $4 billion provision expense to account for expected credit delinquencies, including $940 million in net charge-offs on loans and debt securities and a $3.1 billion reserve build.
On this news, Wells Fargo's stock price fell $4.54, or 14%, over three consecutive trading sessions to close at $26.89 per share on April 16, 2020.
On May 5, 2020, the Company filed its quarterly report with the SEC for first quarter 2020, in which it stated that Wells Fargo's collateralized loan obligations ("CLOs") investments fell 9% and that the Company suffered $1.7 billion in unrealized losses on its CLO investments during the quarter.
On this news, Wells Fargo's stock price fell $1.74, or 6%, over two consecutive trading sessions to close at $25.61 per share on May 6, 2020.
On June 10, 2020, the Company's Chief Financial Officer, John Shrewsberry, presented at the Morgan Stanley Virtual US Financials Conference, during which he stated that the second quarter reserve build would be even "bigger than the first quarter" due to continued deterioration in the Company's credit portfolio.
On this news, Wells Fargo's stock price fell $5.84, or 18%, over two consecutive trading sessions to close at $26.79 per share on June 11, 2020.
On July 14, 2020, the Company announced its second quarter 2020 financial results in a press release, disclosing a $9.5 billion provision expense to account for expected credit delinquencies.
On this news, Wells Fargo's stock price fell $1.16, or 5%, to close at $24.25 per share on July 14, 2020.
On October 14, 2020, the Company announced a $769 million provision expense for third quarter 2020, but the Company's CFO stated that further deterioration of the credit portfolio had been forestalled due to short-term customer accommodations provided since the start of the pandemic.
On this news, Wells Fargo's stock price fell $1.49, or 6%, to close at $23.25 per share on October 14, 2020.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Wells Fargo had systematically failed to follow appropriate underwriting standards and due diligence guidelines in issuing billions of dollars' worth of commercial loans, including by inflating the net income and future expected cash flows of its commercial clients to justify issuing excessive loan amounts; (2) a materially higher proportion of Wells Fargo's commercial loans were to customers of poor credit quality and/or at a substantially higher risk of default than disclosed to investors; (3) Wells Fargo had failed to timely write down commercial loans, CLOs and CMBS on its books that had suffered impairments; (4) Wells Fargo had materially understated the reserves needed for expected credit losses in its commercial portfolios; (5) Wells Fargo had systematically misrepresented the credit quality and likelihood of default of the loans it packaged and securitized into CLOs and CMBS, including by artificially inflating the net income and expected cash flows of its commercial clients in loan and securitization documentation; (6) the CLO and CMBS-related loans issued and investment securities held by Wells Fargo were of lower credit quality and worth far less than represented to investors; (7) as a result of the foregoing, the Company's statements regarding the credit quality of its commercial loans, its underwriting and due diligence practices, and the value of its CLO and CMBS books were materially false and misleading; and (8) as a result of the foregoing, the Company was exposed to severe undisclosed risks of financial, reputational and legal harm, in particular in the event of significant and sustained stress in the commercial credit markets.
If you purchased or otherwise acquired Wells Fargo common stock, you may move the Court no later than December 29, 2020 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to [email protected], or visit our website at www.howardsmithlaw.com.
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SOURCE Law Offices of Howard G. Smith