Wells Fargo Hit With Defamation Suit Over Fake Accounts Scandal

A former Wells Fargo regional president has filed a defamation suit against the bank for “destroying” her reputation, saying it falsely labeled her as one of the parties responsible for the fake-accounts scandal.

In a lawsuit filed Wednesday in the U.S. District Court for the Northern District of California, Shelley Freeman, former regional president for Wells Fargo in Los Angeles, is seeking damages for Wells Fargo choosing “to tar and feather” her, “without cause, to protect others,” including former Wells Fargo CEO Tim Sloan.

From 2013-2017, Wells Fargo “was in crisis,” the lawsuit states, as the bank was caught selling “unwanted, unneeded products to its customers and opening millions of unauthorized accounts.”

The bank agreed to pay the city of Los Angeles, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau $185 million in fines and agreed to take corrective actions as set forth in the settlement with the city and in consent orders with governmental agencies, the order states.

In its effort to manage the fallout from the scandal, “Wells Fargo, without regard to the truth, labeled Plaintiff as one of the parties responsible for the scandal,” the suit states. “In doing so the Bank ignored massive amounts of information in its own records which proved otherwise.” The bank, the suit states, “maliciously defamed” Freeman worldwide.

From 2002 to 2008, Plaintiff was Wells Fargo’s regional president in Los Angeles, and “in that position she received outstanding performance reviews each year,” the suit states.

In October 2013, the Los Angeles Times published its first article regarding the sales practices scandal at Wells Fargo Bank.

“Los Angeles became known as the epicenter of simulated funding, the most well-known aspect of the sales practice failures at Wells Fargo Bank,” the suit states.

However, “these abhorrent sales practices surfaced in Los Angeles/Orange County almost five years after Plaintiff had left Los Angeles to assume” a new position as lead regional president of Florida.

Freeman, according to the suit, “had never had responsibility for Orange County. There was no evidence that simulated funding existed in the Los Angeles region while Plaintiff was its Regional President.”

On Feb. 21, 2017, Freeman was advised that she was being terminated “for cause.”

Later that day, Wells Fargo & Co. publicly announced that Freeman had been fired “for cause” in public statement that her termination was part of four terminations of current or former senior managers “based on its Board of Directors ongoing independent investigation into the Company’s retail banking sales practices and related matters.”

Wells Fargo declined to comment on the complaint.