Skip to content

Carrier Management

Critical Information for P/C Carrier Executives

Highlights

  • Does Spending More $ on Defense Reduce Indemnity?
  • Growth Going to be Hard: Abel Talks GEICO, Berkshire Tech ...
  • P/C Industry Loss Reserves Redundant by More Than $20B: ...
  • Carrier Management
  • C-Suite
  • News
  • Research
  • Leadership
  • Markets
  • Regulation
  • Top 50
  • Members Only
  • Join
  • Login
  • Boardroom Agenda
  • CEO / Chief Executive
  • CFO / Financial
  • Underwriting
  • CTO / Technology
  • Risk
  • Brand Management & Sales
  • Investment Officers
  • Claims / Legal
  • Talent Management
Extreme Weather to Drive $20 Trillion in Spending
USAA Not Done With Dividends: Florida Reforms Prompt $0.5B Payout
  • U.S.
  • International
  • Industry News
  • Government
  • Technology & Science
Extreme Weather to Drive $20 Trillion in Spending
Multimillion-Dollar Insurance Fraud Results in 4 Arrests

See all News

  • Executive Spotlight
  • Innovation
  • Strategy
  • Leadership
  • Performance
  • Growth Initiatives
  • Social Responsibility
A $10.5 Trillion Cyber Problem: Whose Risk Is It Anyway?
Exclude It, Harness It, Get Greedy: McGavick’s Take on Insurers’ AI Playbook
  • Reinsurance
  • Emerging Markets
  • Global Economy
  • Personal Lines
  • Commercial Lines
  • Specialty
Amazon’s Ring Sued Over Facial Recognition Feature
Bending the Casualty Curve: Why Casualty Analytics Is Approaching Its Inflection Point
  • Insurance Regulation
  • Securities Regulation
  • Accounting & Tax
  • Rating Agencies
Kim and Allen Lead Voting in California Insurance Commissioner Primary
Illinois Passes Legislation to Give Insurance Department Oversight of Rate Changes
Progressive Is Biggest Auto Insurer, Surpassing State Farm: S&P GMI
The Big Dog Is Off the Tech Porch: State Farm as ‘Next Gen Good Neighbor’
Who Will Be California’s Next Insurance Commissioner?
Insurance Data and the Complex Loops Redefining Casualty Risk

See all Top 50

Beyond Consensus: The Leadership Advantage Insurance Execs Need Now
How We’re Doing It: Customers, Agents Play Vital Roles in Commercial Auto Telematics Success
Your Tech Stack Is Your Recruiting Strategy (Whether You Know It or Not)
The Financial Case for Negotiation: How Indemnity Discipline Can Transform Carrier Economics

See all Members Only Content

Benefits

  • News for the P/C Insurance C-Suite - Focused reporting from reliable sources and experienced financial journalists.
  • Research and Analysis Not Found Elsewhere - Exclusive content from researchers think tanks, industry experts and respected analysts.
  • High-Profile Peers - Interviews with thought leaders in the global and U.S. insurance industry.

Online Access

Complete, unrestricted access to the popular CarrierManagement.com website, which provides insurance company C-suite executives with daily news, white papers, advice, instruction and editorial on how to manage insurance companies more efficiently and more effectively.

Wells Fargo, Ex-CEO Fail to Squash Shareholder Lawsuit Over Fake Accounts

Print Email
March 1, 2018 by Kartikay Mehrotra

A federal judge denied Wells Fargo & Co.’s request to dismiss a shareholder lawsuit triggered by the bank’s plummeting stock price after it admitted in 2016 to creating millions of fake accounts, starting the worst financial scandal in its modern history.

U.S. District Judge Jon Tigar in San Francisco ruled Tuesday that shareholders can proceed with most claims in a suit alleging the company and its current and former leaders misled shareholders about its opening of unauthorized accounts. Investors blame the company for the stock’s 9 percent drop after details of the scandal became public in September 2016.

Former Chief Executive Officer John Stumpf will continue to face claims of insider trading. Tigar dismissed insider-trading claims against four other executives. Among them is Carrie Tolstedt, who ran the division where the accounts were created. Claims against her may be amended and refiled as additional allegations against Wells Fargo and its leadership, including Securities Exchange Act violations, may continue.

“Stumpf concealed the fact that the company had made substantial findings of the unlawful activity and actual fraud in its community banking segment as part of its investigation, which not only exposed millions of customers to unlawful fees and potential identity theft, but put the company in the cross-hairs of federal investigations,” shareholder Gary Hefler alleged in the complaint.

Cross-Selling

Central to the dispute is Wells Fargo’s practice of cross-selling, or using the sale of one product to push others. Millions of those additional accounts were created without consumer approval, then reported to shareholders in artificially inflated quarterly reports, according to the complaint. The bank and its executives’ statements “about the success of Wells Fargo’s cross-selling and its commitment to providing value for customers were both material and false or misleading,” Tigar wrote in the ruling.

“We disagree with the allegations in the complaint,” Ancel Martinez, a spokesman for the bank, said in an emailed statement. “We continue to take decisive steps to rebuild the trust of our customers, team members, community partners and shareholders and are focused on building a better Wells Fargo.”

The investor who sued seeks class-action status on behalf of all shareholders from Feb. 26, 2014, to Sept. 15, 2016.

Tigar linked the order to a similar derivative action in his court against Wells Fargo, in which he also ruled that shareholders may proceed with a suit alleging the company’s top brass “repeatedly and brazenly” failed to serve their best interests. That complaint properly laid out evidence showing executives and directors made false statements about the scheme in the bank’s filings to the U.S. Securities and Exchange Commission.

The shareholder case is Hefler v. Wells Fargo & Co., 3:16-cv-05479, U.S. District Court, Northern District of California (San Francisco).

Copyright 2026 Bloomberg.
Print Email
Claims / LegalClaims & ReservingCommercial LinesLitigation/Liability TrendsMarketsNewsThe C-SuiteU.S.

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

The Big Dog Is Off the Tech Porch: State Farm as ‘Next Gen Good Neighbor’
AI Savings Misses ‘Should Be Making Executives Uncomfortable,’ Bain Says
Your Next Job Interview Could Be With an AI Bot
AI Poised to Tilt Job Market Leverage Toward Older Workers

Related Articles

Wells Fargo Suit Alleges Bank Encouraged Use of Hidden Fees in Finance Programs
Wells Fargo Reportedly Risks Record Fine From U.S. Consumer Watchdog for Various Abuses
Wells Fargo Could Get $1B Fine to Resolve Auto Insurance, Mortgage Lending Abuses
Hub International Will Acquire Wells Fargo’s Crop Insurance Broker Business
Wells Fargo Risks Calif. Suspension of Licenses Over Insurance Sales Practice Controversy
Judge Rejects Wells Fargo Bid to End Predatory Lending Lawsuit
Wells Fargo Will Get Out of Personal Insurance Business
Wells Fargo Will Pay $480M to Resolve Fake-Accounts Lawsuit
Wells Fargo Settles Phony Bank Account Scandal for $142M

Latest Magazine

Carrier Management magazine
View All

Research & Whitepapers

Free Newsletter

NewsletterSign up to receive daily news!

Our Contributors

John BurgeThe Financial Case for Negotiation: How Indemnity Discipline Can Transform Carrier EconomicsJesse NickersonBending the Casualty Curve: Why Casualty Analytics Is Approaching Its Inflection PointTory FarneyStorm Counts, Landfalls and Losses: The Hidden Risk Behind a ‘Quiet’ Hurricane SeasonWesley TerweyStorm Counts, Landfalls and Losses: The Hidden Risk Behind a ‘Quiet’ Hurricane SeasonSee All Our Contributors

News

  • Extreme Weather to Drive $20 Trillion in Spending
  • USAA Not Done With Dividends: Florida Reforms Prompt $0.5B Payout
  • Multimillion-Dollar Insurance Fraud Results in 4 Arrests
  • Suspects Indicted for Impersonating Shipping Carriers in $5M Multi-State Theft Ring
  • Drone Crashes, Severed Fingers Pose Problems for $13B Silicon Valley Military Startup
  • Jury Awards $176M After 2 Boys Killed When California Socialite’s Car Hit Them
  • C-Suite
  • News
  • Leadership
  • Markets
  • Regulation
  • Top 50
  • Members Only
  • Videos

Headlines

  • Does Spending More $ on Defense Reduce Indemnity?
  • Growth Going to be Hard: Abel Talks GEICO, Berkshire Tech ...
  • P/C Industry Loss Reserves Redundant by More Than $20B: ...
  • How Modern is Modern Enough?

Resources

  • Videos / Podcasts
  • Contributors

Popular Topics

  • Boardroom Agenda
  • Technology
  • Financial
  • News

Brand Spotlight

  • Cotality
  • Cytora
  • HazardHub
  • Indico Data
  • Majesco
  • Verisk
  • Vertafore

Connect with us

  • Email Newsletters
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Carrier Management

  • Submit Content
  • Advertise
  • Subscribe
  • Contact Us

Wells Media Group Network

  • Carrier Management iconCarrier Management
  • Insurance Journal iconInsurance Journal
  • Claims Journal iconClaims Journal
  • IJ Academy iconInsurance Journal Academy
  • Insurance Journal TV iconInsurance Journal TV
  • MyNewMarkets.com iconMyNewMarkets.com
© 2026 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map