Wells Fargo & Co. bungled the 2020 sale of Occidental Petroleum Corp. shares on behalf of an employee trust, leading to millions of dollars in losses when the bank failed to execute trades as planned before the Covid-19 pandemic tanked the stock market, a judge in Texas ruled.
https://www.bloomberg.com/news/articles/2022-08-18/wells-fargo-botched-occidental-petroleum-stock-sale-judge-rules#xj4y7vzkg
The headline seems a little misleading. Looks like this other company shares in the blame too. Maybe even a bigger share of the blame
Who the heck is Equiniti? I just looked them up and it says:
“The acquisition of Wells Fargo’s share registration business positions Equiniti for growth in the world’s deepest capital market, enhancing the opportunities for cross-selling to new and existing clients and providing an opportunity to gain a greater share of the share registration and employee plans market in the United States.”
So this is another business that Charlie sold off? And it’s resulted in a problem/error/lawsuit?
Shocking.
Cool so I could get like 6 bucks if I fill out a 45 min form?
Here's the case itself.
https://casetext.com/case/occidental-petroleum-corp-v-wells-fargo-bank-1
On January 7, 2020, a Wells Fargo representative called an Equiniti representative to confirm the transfer process for the direct registration shares. (Docket Entry No. 55 at 11). Equiniti instructed Wells Fargo to complete a direct registration Transaction Request and send it back to Equiniti. (Docket Entry No. 55 at 11). Wells Fargo submitted the Transaction Request to Equiniti on the same day, “instructing Equiniti to sell the remaining 29, 340 shares in what Wells Fargo had planned to be the balance of the second tranche.” (Docket Entry No. 55 at 11). Wells Fargo alleges that Equiniti first confirmed the Transaction Request on January 7, 2020, but on January 8, 2020, Wells Fargo learned that Equiniti had rejected the Transaction Request. (Docket Entry No. 55 at 11). Wells Fargo resubmitted the Transaction Request on January 8, 2020, and on January 9, 2020, Wells Fargo sent another Transaction Request to Equiniti to sell the remaining three tranches of Occidental stock. (Docket Entry No. 55 at 11). Wells Fargo alleges that it used the Transaction Request forms Equiniti provided and filled each of them out the same way. (Docket Entry No. 55 at 12). Wells Fargo alleges that Equiniti transferred the remaining 29, 340 shares of the second tranche on January 13, 2020, to street name shares, and then sold the shares. (Docket Entry No. 55 at 11). That same day, Equiniti informed Wells Fargo that it could expect to receive the proceeds of the sale of the Occidental stock from the Trust by January 27, 2020. (Docket Entry No. 55 at 12).
On January 14, 2020, Equiniti sold an additional 29, 340 shares, which had been direct registered in Wells Fargo's name. Wells Fargo alleges that this sale was unauthorized and in error because Equiniti had already sold the remaining 29, 340 shares from the second tranche. (Docket Entry No. 55 at 12). On January 31, 2020, Wells Fargo told Occidental that Equiniti had not completed the requested transfers and sales and that Wells Fargo was having difficulty communicating with Equiniti. (Docket Entry No. 55 at 13). Occidental did not respond. (Docket Entry No. 55 at 13).
Wells Fargo alleges that between January 31, 2020, and February 14, 2020, Wells Fargo monitored the status of the sales and attempted to obtain information from Equiniti. (Docket Entry No. 55 at 13). On February 14, 2020, Wells Fargo learned that Equiniti had failed to complete the sales in January. (Docket Entry No. 55 at 13). Wells Fargo learned that Equiniti had sent a written request by U.S. mail to Wells Fargo in January 2020, asking Wells Fargo to confirm the number of shares to be sold. (Docket Entry No. 55 at 13). Wells Fargo alleges that this information was “unambiguously” written on the Transaction Requests, that Equiniti knew this request would not arrive at Wells Fargo in less than 10 days, and that Equiniti did not use any other means-such as by phone, fax, email, or overnight carrier-to notify Wells Fargo that it had not sold the remaining stock. (Docket Entry No. 55 at 13). Wells Fargo finally received the written request to confirm the number of shares on February 16, 2020. (Docket Entry No. 55 at 14).
Wells Fargo alleges that it immediately started filling out new Transaction Requests, but it needed a new account statement from Equiniti. (Docket Entry No. 55 at 13-14). Wells Fargo requested the account statement on February 19, 2020, and Wells Fargo agreed to pay for overnight delivery of the requested statement. (Docket Entry No. 55 at 14). On February 20, 2020, Equiniti informed Wells Fargo that it had pulled an incorrect statement and the mailing would be delayed. (Docket Entry No. 55 at 14). Equiniti sent the requested statement on February 24, 2020, and Wells Fargo received it on February 26, 2020, with obvious errors. (Docket Entry No. 55 at 14).
As a result of the difficulties with Equiniti, Wells Fargo transferred the remaining stock to the Depository Trust Company. All remaining stock was transferred to the Depository Trust Company on March 18, 2020, and sold on March 20, 2020. (Docket Entry No. 55 at 15). Occidental filed this action against Wells Fargo on April 6, 2021. (Docket Entry No. 55 at 15).
Wells Fargo, in its capacity as Trustee, sued Equiniti, asserting claims for negligence and negligence per se. Wells Fargo sued in its individual capacity for breach of contract, violations of UCC §§ 8-401 and 8-407, and contribution or reimbursement from Equiniti for Wells Fargo's losses and damages from Occidental's claim against Wells Fargo. (Docket Entry No. 55 at 15). Equiniti has moved to dismiss based on lack of personal jurisdiction and failure to state a claim.
If somebody can read the whole thing, please post the text here.