Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04518/USCOURTS-cand-3_05-cv-04518-35/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 28:1331 Fed. Question: Securities Violation

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

RONALD SIEMERS, individually and on

behalf of all others similarly situated,

Plaintiff,

 v.

WELLS FARGO & CO.,WELLS FARGO

FUNDS MANAGEMENT, LLC, WELLS

CAPITAL MANAGEMENT, INC., H.D.

VEST INVESTMENT SERVICES, WELLS

FARGO INVESTMENTS, LLC, STEPHENS,

INC., and WELLS FARGO FUNDS TRUST,

Defendants. /

No. C 05-04518 WHA

ORDER GRANTING

PLAINTIFFS’ MOTION

TO COMPEL DISCOVERY

AND VACATING HEARING

No hearing is required to resolve the discovery dispute set forth in the January 16, 2007,

letter from Mr. Gutride. 

One vice of revenue sharing is the temptation to misappropriate the investors’ money in

the common fund to finance ongoing distribution for the benefit of the sponsors of the fund. 

Recognizing that some subtractions from the common fund can be legitimate, one issue is

whether all of the subtractions can be justified. Another issue is the sheer size and scope of the

subtractions used for ongoing distribution, a question which informs the conflict-of-interest

question and the materiality issue. It is important to learn the overall scope of all payments

made as part of the process of sorting out how much of it, if any, was improper. 

Case 3:05-cv-04518-WHA Document 239 Filed 02/26/07 Page 1 of 2
United States District Court

For the Northern District of California

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Contrary to defendants, dollars sent to non-affiliated brokers are just as relevant as

dollars sent to affiliated brokers. All such dollars are for ongoing distribution, at least arguably. 

Therefore, defendants may not draw a shroud around their payments to A.G. Edwards and other

non-affiliated brokers. Nor may it distinguish between payments for “access” versus payments

for “increased access.” Plaintiffs are entitled to discover the full scope of hard and soft dollars

that went, directly or indirectly, from the Wells Fargo funds at issue or their sponsors to any

broker during the class period, reserving for trial or summary judgment whether the payments

were improper or should have been disclosed. 

While not all Wells Fund funds are at issue herein, it is necessary for all payments

(to brokers) from any Wells Fargo fund or sponsor to be discovered, so that an intelligent

allocation can be made within the class period. 

Within FOURTEEN CALENDAR DAYS, defendants shall answer in full the amount of hard

and soft dollars of any type that went, directly or indirectly, to any broker from any Wells Fargo

fund or sponsor, by year, during the alleged class period. This should be identified by broker,

by year, by type of payment (e.g., research, commissions, etc.), and source (adviser versus

fund). If there is a way to allocate the amounts to the Wells Fargo funds at issue, please do this

as well. To the extent reasonably related to the foregoing, please answer the balance of

plaintiffs’ interrogatories and provide the remaining documents requested within FOURTEEN

CALENDAR DAYS. Normal sales loads do not have to be identified. The motion to compel is

GRANTED to the foregoing extent. 

This is a final order. It is not tentative. 

IT IS SO ORDERED.

Dated: February 26, 2007. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-04518-WHA Document 239 Filed 02/26/07 Page 2 of 2