• July 24, 2017

In car manufacturing, some manufacturers and, more specifically, certain models enjoy solid reputations of dependability.

Imagine a scenario where, over several years, the manufacturer of such a highly respected model starts cutting expenses and investment in the model (that is, lowers quality), while keeping the price the same, or even increasing it a bit (thus goosing the profit margin).

Imagine that the employees at the car company see the decline in quality but, for the rank and file, it is none of their business, figuratively speaking. They’re designers, line-workers, mid-level management, sales staff, etc. etc. They might joke among themselves (“how many piles of junk are coming off the line today?” or whatever) but, most, without the slightest twinge of guilt, toe the company line — it’s a great car, a great value, etc. — and they sincerely believe it, sort of.

And let’s say someone sues the car company for fraud. The long-boasted high-quality and dependable car is a “pile[ ] of junk as Manufacturer’s own workers admit,” we can imagine the plaintiffs’ lawyers saying in their class action complaint.

This, in effect, appears to be how Wells Fargo defends claims that it misled investors and saddled them with the investment equivalent of “piles of junk” once thought to be some of the most solid investment vehicles riding on the road of financial securities…

Plaintiffs no doubt will fall back on their strategy of plucking isolated statements out of context, ascribing ill-motives to people who did their utmost for their clients under the most trying circumstances, and stubbornly repeating factual allegations that have been conclusively disproved time and again.

We’re covered this large lawsuit for years now. The reversals have been dramatic. At this point, it seems that Wells Fargo, the big winner in the jury trial faces long odds in the exact same case, now committed to decision-making of the judge (U.S. District Court Judge Donovan W. Frank (D. Minn.)). On the other hand, with the twists and turns that the case is already known for, we’ll take a pass on predicting any further outcomes.


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