In In re Wells Fargo & Co. Shareholder Derivative Litigation, No. 16-cv-05541-JST (N.D. Cal. Oct. 4, 2017), plaintiffs brought a shareholder derivative action against officers and directors of Wells Fargo & Company, alleging that the defendants knew or consciously disregarded that Wells Fargo employees were illicitly creating millions of deposit and credit card accounts for customers without the customers’ knowledge or consent.  They allege, among other things, that the defendants knew or should have known of fraudulent cross-selling practices as early as 2007, when the Audit and Examination Committee and the CEO received letters from an employee describing unethical and illegal activity, and that additional notice was provided by complaints through the company’s ethics hotline beginning in 2008, a 2008 whistleblower lawsuit, employment-related lawsuits beginning in 2009, investigations and inquiries by the Office of the Comptroller of Currency and the Consumer Financial Protection Bureau by 2012, and a 2013 article in the Los Angeles Times.  Notwithstanding these alleged red flags, the defendants allegedly participated in preparing and signing onto public filings containing inflated cross-sell metrics and other false or misleading statements.  Plaintiffs asserted claims for breach of fiduciary duty, violations of several provisions of the securities laws, and other statutory and common law violations.  The court granted in part and denied in part the defendants’ motion to dismiss.  With respect to the claims against three individual defendants for breach of fiduciary duty, the court found that the complaint sufficiently alleged that the defendants knew about the fraudulent scheme or, given their positions at the company, had “access to information about the alleged fraud, the various lawsuits related to the fraud, and the regulatory investigations,” but nonetheless “took no action to remedy these problems.”