Cotchett, Pitre & McCarthy announces today, May 15, 2026, Judge Trina Thompson of the United States District Court in the Northern District of California granted final approval of the historic $110 million settlement reached in In re Wells Fargo & Co. Consolidated Derivative Shareholder Litigation, a seminal derivative lawsuit brought by Wells Fargo shareholders that essentially combined two cases into one, and alleged that the Bank’s Board of Directors breached their fiduciary duties with regard to Wells Fargo’s discriminatory hiring and lending practices.
Under the settlement agreement, Wells Fargo will implement a $100 million Borrower Assistance Fund, providing mortgage assistance to benefit low-income and moderate-income borrowers in designated census tracts across the United States. The program, negotiated after years of litigation, will ensure that Wells Fargo creates a “more inclusive housing system” and directly assist low-income customers in achieving homeownership. The settlement also requires $10 million to be paid by the insurers of the Board of Director Defendants to Wells Fargo.
The Settlement resolves numerous lawsuits stemming from widespread reports in 2022 that Wells Fargo was engaging in discriminatory hiring practices, including sham job interviews with minority candidates for positions that had already been filled by other people, while the Bank touted its diverse hiring practices in public SEC filings. The lawsuits were also based on separate reports in 2022 that Wells Fargo had approved fewer than half of Black homeowners’ refinancing applications in 2020, resulting in large disparities in Black and White lending approval rates.
The lawsuits, including a derivative action filed by long-time Wells Fargo shareholder Amy Isenberg, were ultimately consolidated together in federal court in San Francisco, California.
In September 2024, the Court substantially denied motions to dismiss filed by Wells Fargo and the Directors, permitting shareholders to move forward on claims that the Directors breached their fiduciary duties by failing to properly oversee discriminatory lending practices. Further, on an issue of first impression, the Court allowed shareholders to pursue securities fraud claims against the Directors based on their approval of Wells Fargo’s share repurchases at prices allegedly inflated by the Bank’s touted hiring practices. After extensive discovery, and with a 2026 trial date fast approaching, the parties negotiated the settlement.
At the hearing to consider the Plaintiffs’ proposed deal, Judge Thompson hailed the “historic” Settlement which served as a model for other banking institutions to follow:
“This program at least provides an exceptional amount of hope for a lot of people who did not think the American dream would be available to them under these economic times. . . [P]eople know I don’t throw out a bunch of compliments but when I see gold standard, I know it when I see it and this is it . . . I applaud each of you in your creativity and the historical moment you have just created . . . I think this is a win-win for everybody.”
(Judge Thompson, Hearing Transcript).
In this afternoon’s Order, Judge Thompson touted the potential benefits from the Settlement:
“Efforts to address past shortcomings, particularly around hiring practices and organizational accountability, are critical to rebuilding trust. Restorative measures that prioritize transparency, equitable hiring, and internal culture reform will be essential in ensuring that progress is both genuine and sustainable.
Taken together, these developments suggest a more comprehensive strategy: one that aligns external financial inclusion with internal institutional change. If implemented consistently and with accountability, these efforts can help repair relationships with marginalized communities and set a stronger precedent for the financial sector at large. While continued monitoring, community engagement, and measurable benchmarks will be key to evaluating the program’s long-term success, this initiative marks an encouraging move toward a more inclusive and responsible banking framework.”
(Judge Thompson Final Approval Order).
Mark Molumphy, Tyson Redenbarger, Gia Jung and Elle Lewis worked on the case from Cotchett, Pitre & McCarthy, LLP, one of the Court-appointed Co-Lead Counsel. The firm worked closely with Frank Bottini and Aaron Arnzen from Bottini & Bottini, Inc., which served as Additional Counsel.
Notably, the same two firms recently served as co-lead counsel in the Twitter class action and obtained a jury verdict against Elon Musk in March 2026, with damages estimated at over $2.6 billion.
Mark Molumphy, a partner at Cotchett, Pitre & McCarthy, said:
“The public has the right to expect that Wells Fargo’s hiring and lending decisions will be based on legitimate factors. Home ownership is a cornerstone of the American dream and has even more profound benefits for families from historically underserved communities. Today’s settlement launches a new program that will provide down payment and closing costs assistance to thousands of low- and moderate-income borrowers and help them obtain the benefits of homeownership.”
Tyson Redenbarger, a partner at Cotchett, Pitre & McCarthy, added:
“The judge rightfully described this settlement as a ‘win win’ for Wells Fargo, its shareholders and its customers. The settlement represents meaningful progress in addressing discrimination by implementing a program that provides real support to individuals who have historically faced financial discrimination and have lacked access to programs of this kind.”
Cotchett Pitre & McCarthy LLP, Motley Rice LLC, and Bleichmar Fonti & Auld LLP served as co-lead counsel for plaintiffs in the litigation, played a central role in negotiating the settlement and developed the abatement framework. The case is In re Wells Fargo & Company Hiring Practices Derivative Litigation, Case No. 22-cv-05173-TLT.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260515965661/en/
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