July 29 (Reuters) - A U.S. judge ordered Wells Fargo ( WFC )

to face a lawsuit alleging it defrauded shareholders by

proclaiming its commitment to hiring diversity, even as it

conducted sham job interviews of non-white and female applicants

it had no plans to hire.

U.S. District Judge Trina Thompson in San Francisco, who

dismissed a version of the lawsuit last August, on Monday found

direct and indirect evidence that the San Francisco-based bank

intended to defraud shareholders about its hiring practices.

She rejected arguments that there was insufficient proof

that fake interviews were widespread, or that top officials

including Chief Executive Charles Scharf knew about it.

Shareholders challenged 11 bank statements touting the

success of a policy adopted in March 2020 that at least 50% of

candidates interviewed for jobs paying at least $100,000 be

minorities, women or people in other disadvantaged groups.

They cited interviews with former employees, an internal

whistleblower email, and the sudden retirement of a senior

wealth manager who allegedly pressured the whistleblower into

conducting fake interviews.

"The employee-submitted complaints, the peculiar timing of

[the manager's] departure, and defendants' demonstrated focus on

diversity issues supports a strong inference of [fraudulent

intent] that is cogent and at least as compelling as an opposing

inference that defendants remained oblivious," Thompson wrote.

In a statement, Wells Fargo ( WFC ) said it would continue defending

against the lawsuit. It noted that the Department of Justice and

Securities and Exchange Commission closed investigations into

its hiring practices without taking action.

"Wells Fargo ( WFC ) is deeply dedicated to diversity, equity and

inclusion and does not tolerate discrimination in any part of

our business," it added.

Lawyers for the shareholders did not immediately respond to

requests for comment.

The fourth-largest U.S. bank has since 2016 faced many

complaints and public criticism over its business practices, and

remains under a Federal Reserve cap on asset growth.

Wells Fargo's ( WFC ) share price fell 10.2% over two days in June

2022, wiping out more than $17 billion of market value, after

the New York Times reported the Justice Department probe.

The case is SEB Investment Management AB et al v Wells Fargo

& Co ( WFC ), U.S. District Court, Northern District of California, No.

22-03811.