Former Wells Fargo Advisors Sue the Company Over Cross-Selling

Two former Wells Fargo advisors are suing the firm for breach of contract, unfair business practices, and retaliation after they say they resisted pressure from their supervisors to secretly transfer sensitive client information from the advisor and brokerage side of the company to the private bank.

The advisors, Karen Keusayan and Richard Green, are also alleging that Wells Fargo improperly withheld deferred compensation after they resigned in 2021 and joined Morgan Stanley , where they are still registered.

In their complaint, filed in Los Angeles County Superior Court, the advisors describe themselves as high-producing employees who were loyal to the company even through the “nightmarish” years of 2015 to 2017, when Wells Fargo’s banking division was “publicly scorned” for the fake account scandal.

“This is not the ‘sour grapes’ case of a disgruntled employee(s) who sought a promotion and did not get one,” the advisors say in their complaint. “Neither Ms. Keusayan nor Mr. Green ever wanted to leave Wells Fargo. The goal for each had always been to retire at Wells Fargo.”

Wells Fargo declined to comment on the lawsuit.

The two advisors joined forces in 2015 to form a “production partnership,” according to the complaint, which says they grew their book of business to more than $1 billion by 2020.

In 2018, Wells Fargo introduced a new element to its advisor compensation plan, according to the complaint. Advisors were expected to complete forms called client discovery reviews, or CDRs, detailing information about advisory clients. The plaintiffs say they were directed by a compliance officer to keep the forms secret from the clients themselves.

Instead, the CDRs were intended for Wells Fargo’s private bank, “not the broker-dealer/financial services side where plaintiffs worked,” according to the complaint.

They contend that advisors were pressured to work with clients to complete CDRs, which would be secretly shared with Wells Fargo private bankers who could use them as sales leads.

Before submitting the forms to count toward a quota that resulted in additional compensation, the advisors had to check three boxes stating that they had discussed the information with the client, that the information was accurate, and that they had offered the client an opportunity to obtain a copy of the document. On that last item, the plaintiffs allege that Wells Fargo essentially instructed the advisors to lie, explaining that the document didn’t belong to the advisors, but the bank, even though the information came from their own clients.

“[H]igh-ranking compliance personnel at Wells Fargo Advisors repeatedly told plaintiffs to never deliver or present the CDR to the client since, as it was explained by compliance, the CDR was a bank document,” the complaint states. “Worse, plaintiffs were told not to inform the client that a CDR had been prepared.”

The plaintiffs say that these “dishonest instructions” put them in an “impossible position” and that they soon began raising concerns with their superiors. But each time they spoke out, they were told by their supervisors to continue submitting the forms as a requisite part of the company’s compensation plan.

The complaint describes the advisors’ growing unease with being pressured to falsify the CDR submission document, as well as concerns over the personal privacy of their clients, whose information was allegedly being shared internally without their knowledge or permission.

The advisors say that their bosses undertook a retaliatory campaign against them for continuing to raise objections to the CDR program, “including by failing to provide the banking support that plaintiffs and their clients had come to expect as a benefit of being associated with a large, full-service, retail bank,” according to the complaint.

They also say that the advisors felt their jobs were at risk, offering examples of a hostile or coercive work environment. “Mr. Green was berated by a yelling supervisor in front of fellow employees, and Ms. Keusayan was informed that the bank would not issue a routine credit card to her sister (a customer) if a CDR was not on file,” according to the complaint.

The advisors say the deteriorating work environment ultimately led them to resign around July 2021, after which they were informed that they were ineligible for large sums of deferred compensation—$662,000 for Keusayan and nearly $814,000 for Green.

The advisors are seeking to recoup the deferred comp they say they are owed, and are asking the court for additional damages, as well as an injunction barring Wells Fargo from engaging in the conduct alleged in the complaint, among other relief.

Reporting season has once again reminded investors that a strong profit does not guarantee a rising share price, and a large loss does not always trigger a sell-off. What matters most is how each result compares with expectations and, increasingly, what management says about the year ahead. During the August 2026 season, companies offering credible turnarounds or unexpectedly strong guidance were rewarded handsomely, while those flagging weaker margins, slowing demand or greater uncertainty were punished.

The following ranking draws on Morningstar’s review of 164 ASX-listed companies and measures each company’s share-price movement on the day it reported. This captures the market’s immediate response to the earnings announcement, before subsequent economic developments, dividends and company-specific news cloud the picture. Here are the five biggest winners, and the five hardest-hit losers, of the season so far.

The five winners

1. Bapcor (ASX:BAP): +41.0%

Bapcor delivered reporting season’s largest relief rally after presenting early evidence that its troubled automotive-parts business was stabilising. Although underlying revenue fell 1.8% to $1.92 billion and underlying NPAT collapsed 85% to $10.8 million, underlying EBITDA of $152.5 million exceeded guidance.

More importantly, working-capital initiatives released $68.5 million in the second half, lifting cash conversion to 109.4% and reducing net debt by 63% to $135 million. The statutory loss was $431.6 million, largely because of non-cash impairments. Investors focused on improving operational momentum, stronger liquidity and management’s expectation of modest FY27 revenue growth.

2. Zip Co (ASX:ZIP): +18.2%

Zip comfortably surpassed its FY26 targets, sending the buy-now-pay-later provider’s shares sharply higher. Transaction volume rose 23% to $16.7 billion, while cash earnings before tax, depreciation and amortisation jumped 58% to a record $268.9 million. Statutory profit climbed 46% to $116.4 million, and the cash operating margin expanded by 4.2 percentage points to 20%.

The strongest signal was guidance for FY27 cash earnings of $340 million—around 26% growth and above analysts’ forecasts. US transaction volume increased 42.5% and now represents three-quarters of group volume, offsetting weaker customer activity in Australia.

3. CSL (ASX:CSL): +17.3%

CSL’s result was hardly spectacular in isolation, but it cleared a market bar that had fallen dramatically following earlier downgrades and restructuring announcements. Underlying NPATA was US$3.1 billion, down 2% in constant-currency terms, while operating cash flow reached US$3.51 billion.

CSL maintained its full-year dividend at US$2.92 per share and completed a A$1 billion buyback. The real catalyst was FY27 guidance for approximately 5% underlying profit growth, compared with market expectations closer to 2%. After an extended period of earnings disappointments, investors interpreted the outlook as evidence that CSL’s core plasma business was approaching a sustainable recovery.

4. Judo Capital (ASX:JDO): +16.9%

Judo Capital demonstrated strong operating leverage as its specialist business-lending franchise expanded. Full-year profit before tax rose 34% to $168.1 million, while pre-provision profit increased 42%. Gross loans and advances grew 18% to $14.7 billion, reaching the top of the bank’s guidance range and comfortably exceeding broader system growth.

Deposits increased 24% to $12.2 billion, return on equity improved by 1.1 percentage points to 6.4%, and earnings per share rose 29% to 9.9 cents. Reaffirmation of the FY27 outlook gave investors confidence that loan growth could continue without sacrificing margins or credit quality.

5. Super Retail Group (ASX:SUL): +15.8%

The owner of Supercheap Auto, rebel, BCF and Macpac reported record sales of $4.2 billion, up 3.2%, despite cautious discretionary spending. Profitability went backwards: normalised profit before tax fell 7% to $306 million and normalised NPAT declined 2.8% to $226 million as transformation spending weighed on margins. Nevertheless, the result exceeded subdued expectations, online sales grew 5.3% and membership across the group’s loyalty programs reached 13.1 million. Investors were also encouraged by positive early FY27 trading, stable gross margins and continued market-share gains. A fully franked 33-cent final dividend added to the appeal.

The five losers

1. Hansen Technologies (ASX:HSN): –21.2%

Hansen’s historic result met expectations, but investors recoiled from its outlook. The utility and communications software provider achieved an underlying EBITDA margin of 31%, exceeding its 30% target, while generating strong cash flow. However, management designated FY27 an “investment and transition year”, signalling a roughly five-percentage-point margin contraction as spending on products, sales capabilities and organisational changes increased.

Revenue had already been broadly flat, leaving investors concerned that the investment program would depress earnings before new growth appeared. Leadership changes, including the chief executive’s departure, added uncertainty. Management expects revenue growth and margins above 30% to return in FY28, but the market was unwilling to wait.

2. Life360 (ASX:360): –19.4%

Life360’s headline growth was impressive: quarterly revenue rose 38% to US$159 million, subscription revenue increased 31%, and adjusted EBITDA climbed 53% to US$31.1 million. Monthly active users reached 102.4 million and paying circles grew 27% to 3.2 million. The sell-off reflected expectations rather than a collapsing business.

Net income fell 18%, the net margin contracted from 6% to 3%, hardware shipments dropped 18%, and full-year EBITDA guidance was merely maintained. After a strong valuation run, investors wanted a larger upgrade and clearer evidence that heavy investment in advertising, international expansion and artificial intelligence would generate additional earnings.

3. PEXA Group (ASX:PXA): –17.0%

PEXA reported a 7% increase in continuing-operations revenue and 12% EBITDA growth to $152 million, accompanied by a two-percentage-point margin expansion. Free cash flow increased 39%, suggesting the core Australian electronic-conveyancing platform remained highly profitable. Investors instead concentrated on management’s warning that property-transfer volumes could decline, alongside regulatory uncertainty surrounding the fees PEXA can charge.

The company is also continuing to invest heavily in its loss-making international expansion. Morningstar considered the market reaction excessive, arguing that structural transfer-volume assumptions had not materially changed, but the combination of softer near-term activity and regulatory risk overwhelmed the respectable headline numbers.

4. SEEK (ASX:SEK): –14.3%

SEEK produced solid FY26 figures, including 10% revenue growth to $1.20 billion, a 15% rise in EBITDA and 28% growth in adjusted earnings per share. It also lifted its fully franked annual dividend by 13% to a record 52 cents. Those achievements were overshadowed by falling paid job-ad volumes and cautious FY27 assumptions.

The statutory accounts included a $201 million loss from the SEEK Growth Fund and $377 million of significant items, making the headline result considerably less attractive. Investors were particularly concerned that economic weakness could limit volumes while the company continued investing in platform integration and artificial-intelligence products.

5. JB Hi-Fi (ASX:JBH): –12.3%

JB Hi-Fi’s full-year result was broadly respectable, with group sales rising 5% to $11.1 billion and underlying earnings per share increasing 6% to $4.48. The damage came from its current-trading update. Australian sales were almost flat during the June quarter and deteriorated further in July, while earnings in the core Australian electronics business fell 3.6%.

Housing-related categories were particularly weak as higher living costs and interest rates constrained household budgets. With JB Hi-Fi entering the season on a demanding valuation, an in-line historic result was not sufficient: the loss of sales momentum prompted investors to rapidly reduce their expectations for FY27.

Overall, the season showed that share prices react less to whether profits rose or fell than to the gap between results and expectations. Bapcor was rewarded for being less troubled than feared, while several fundamentally profitable companies were punished because their outlooks failed to justify elevated valuations.