8th Circ. Won't Revive Wells Fargo Workers' 401(k) Fight

Law360 (July 27, 2020, 5:11 PM EDT) -- Wells Fargo workers lost their battle to revive claims that the bank violated the Employee Retirement Income Security Act by staying mum about a fraud scandal that hurt their 401(k) plans, as an Eighth Circuit panel said Monday that earlier disclosure isn't always better.

"We find appellants' allegation based on general economic principles — that the longer a fraud is concealed, the greater the harm to the company's reputation and stock price — is too generic to meet the requisite pleading standard," the panel said in a published opinion.

A group of former and current Wells Fargo employees had argued that...

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