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PIRELLI ARMSTRONG TIRE CORP. RETIREE MEDICAL BENEFITS TRUST v. JOHN G. STUMPF & WELLS FARGO US District Court Case No. C 11-2369 SI

PIRELLI ARMSTRONG TIRE CORP. RETIREE MEDICAL BENEFITS TRUST v. JOHN G. STUMPF & WELLS FARGO US District Court Case No. C 11-2369 SI

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Published by Barry Fagan Esq.
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
PIRELLI ARMSTRONG TIRE
CORPORATION RETIREE MEDICAL
BENEFITS TRUST, and CITY OF WESTLAND
POLICE AND FIRE RETIREMENT SYSTEM,
derivatively on behalf of WELLS FARGO &
CO.,
Plaintiffs,
v.
JOHN G. STUMPF, et al.,
Defendants,
-and-
WELLS FARGO & CO., a Delaware
corporation,
Nominal Defendant.
No. C 11-2369 SI


As early as 2007, Wells Fargo and its subsidiaries began home foreclosure proceedings around
the country. Id. at ¶ 74. Wells Fargo implemented a policy of mass processing the declarations or
affidavits to be submitted in court proceedings to accelerate these proceedings. Id. Plaintiffs allege that
this policy, known as “robo-signing,” had the effect of recklessly avoiding “the work and cost associated
with obtaining facts or documents representing ownership, standing and the right to foreclose on
properties.” Id. at ¶ 75. Therefore, plaintiffs allege, this policy had the effect of concealing the
possibility that title and standing could not be perfected and would require Company employees to cause
Wells Fargo to file false affidavits with courts and state agencies. Id. at ¶¶ 75, 77. Plaintiffs allege that
several Wells Fargo employees routinely executed affidavits without personal knowledge of their
contents. Id. at ¶¶ 83-85, 86-89. This policy is alleged to have continued into the period in which
plaintiffs owned Wells Fargo stock. Id. at ¶ ¶ 78, 86, 172.
In 2010, two Wells Fargo employees testified that they signed unverified affidavits. On January
4, 2010, Stanley Silva (“Silva”) testified that he routinely executed notices of default without verifying the accuracy of the information contained therein. Id. at ¶ 88. On March 9, 2010, Xee Moua (“Moua”)
testified that she signed Wells Fargo loan documents without verifying their contents other than her
name and title. Id. at ¶ 83. Later in 2010 news articles regarding Wells Fargo’s alleged fraudulent
mortgage practices were published. On October 2, 2010, dailyfinance.com published an article entitled
“Robo-signing: Documents Show Citi and Wells Also Committed Foreclosure Fraud” which discussed
Wells Fargo’s robo-signing practices. Id. at ¶ 104. On October 13, 2010, the Star Tribune published
an article summarizing the above evidence. Id. at ¶ 108. The Financial Times published a similar
article on October 14, 2010. Id. at ¶ 109.
In a conference call on October 20, 2010, defendant Atkins stated that the robo-signing policy
was designed by the Company, that the Company had confidence that the policy was sound and
accurate, and that the Company did not plan to initiate a moratorium on foreclosures to investigate the
policy. Id. at ¶¶ 16, 77, 107. During the call defendant Stumpf stated at least twice that the person who
signed the affidavits and the person who reviewed them for accuracy was the same individual. Id. at
¶ 112. One week later, on October 27, 2010, Wells Fargo issued a press release admitting that its
foreclosure processes did not adhere to its formal policy and that a review of more than 55,000
foreclosure affidavits was underway. Id. at ¶ 114.
On January 6, 2011, the New York City Comptroller sent a letter to Moore, Chairman of the
Audit Committee, calling on the Audit Committee “to conduct an independent review of the Company’s
internal controls related to loan modifications, foreclosures, and securitizations.” Id. at ¶ 137. The
Audit Committee is responsible for ensuring compliance with legal and regulatory requirements. Id. at ¶ 138. On January 9, 2011, the Comptroller issued a press release calling on the Audit Committee
of the Board of Wells Fargo, among other banks, to launch an investigation into their foreclosure
practices. Id. at ¶ 140.
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
PIRELLI ARMSTRONG TIRE
CORPORATION RETIREE MEDICAL
BENEFITS TRUST, and CITY OF WESTLAND
POLICE AND FIRE RETIREMENT SYSTEM,
derivatively on behalf of WELLS FARGO &
CO.,
Plaintiffs,
v.
JOHN G. STUMPF, et al.,
Defendants,
-and-
WELLS FARGO & CO., a Delaware
corporation,
Nominal Defendant.
No. C 11-2369 SI


As early as 2007, Wells Fargo and its subsidiaries began home foreclosure proceedings around
the country. Id. at ¶ 74. Wells Fargo implemented a policy of mass processing the declarations or
affidavits to be submitted in court proceedings to accelerate these proceedings. Id. Plaintiffs allege that
this policy, known as “robo-signing,” had the effect of recklessly avoiding “the work and cost associated
with obtaining facts or documents representing ownership, standing and the right to foreclose on
properties.” Id. at ¶ 75. Therefore, plaintiffs allege, this policy had the effect of concealing the
possibility that title and standing could not be perfected and would require Company employees to cause
Wells Fargo to file false affidavits with courts and state agencies. Id. at ¶¶ 75, 77. Plaintiffs allege that
several Wells Fargo employees routinely executed affidavits without personal knowledge of their
contents. Id. at ¶¶ 83-85, 86-89. This policy is alleged to have continued into the period in which
plaintiffs owned Wells Fargo stock. Id. at ¶ ¶ 78, 86, 172.
In 2010, two Wells Fargo employees testified that they signed unverified affidavits. On January
4, 2010, Stanley Silva (“Silva”) testified that he routinely executed notices of default without verifying the accuracy of the information contained therein. Id. at ¶ 88. On March 9, 2010, Xee Moua (“Moua”)
testified that she signed Wells Fargo loan documents without verifying their contents other than her
name and title. Id. at ¶ 83. Later in 2010 news articles regarding Wells Fargo’s alleged fraudulent
mortgage practices were published. On October 2, 2010, dailyfinance.com published an article entitled
“Robo-signing: Documents Show Citi and Wells Also Committed Foreclosure Fraud” which discussed
Wells Fargo’s robo-signing practices. Id. at ¶ 104. On October 13, 2010, the Star Tribune published
an article summarizing the above evidence. Id. at ¶ 108. The Financial Times published a similar
article on October 14, 2010. Id. at ¶ 109.
In a conference call on October 20, 2010, defendant Atkins stated that the robo-signing policy
was designed by the Company, that the Company had confidence that the policy was sound and
accurate, and that the Company did not plan to initiate a moratorium on foreclosures to investigate the
policy. Id. at ¶¶ 16, 77, 107. During the call defendant Stumpf stated at least twice that the person who
signed the affidavits and the person who reviewed them for accuracy was the same individual. Id. at
¶ 112. One week later, on October 27, 2010, Wells Fargo issued a press release admitting that its
foreclosure processes did not adhere to its formal policy and that a review of more than 55,000
foreclosure affidavits was underway. Id. at ¶ 114.
On January 6, 2011, the New York City Comptroller sent a letter to Moore, Chairman of the
Audit Committee, calling on the Audit Committee “to conduct an independent review of the Company’s
internal controls related to loan modifications, foreclosures, and securitizations.” Id. at ¶ 137. The
Audit Committee is responsible for ensuring compliance with legal and regulatory requirements. Id. at ¶ 138. On January 9, 2011, the Comptroller issued a press release calling on the Audit Committee
of the Board of Wells Fargo, among other banks, to launch an investigation into their foreclosure
practices. Id. at ¶ 140.

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Published by: Barry Fagan Esq. on Feb 15, 2012
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