In a lawsuit stunning for giving renewed life to the revenue-sharing scandals and for extending the period certain through 2006, Wells Fargo has been hit with a class-action lawsuit for allegedly sharing mutual fund revenue with brokers and other selling agents, without informing shareholders and through excessively high fees.
To date, all regulatory actions and lawsuits concerning mutual fund trades and share practices have only covered activity through late 2003; then New York State Attorney General Elliot Spitzer unleashed his investigation into the industry on Sept. 4, 2003, and regulators have turned a blind eye to activity after this point.
Whatley Drake & Kallas LLC and Reese Richman LLP announced the lawsuit against the 151-year-old financial services giant and its affiliates Wednesday. Whatley Drake has posted the full complaint on its website.
Defendants did not disclose to investors their pre-existing and ongoing revenue-sharing arrangements, but knowingly hid such information by way of material omissions and halftruths, the law firms allege.
Parties interested in discussing the lawsuit further with Whatley Drake can reach two of the firms New York attorneys: Elizabeth Rosenberg @ 212-447-7070 or Michael R. Reese @ 212-579-4625.