$480M settlement with Wells Fargo shareholders OK'd by judge
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A San Francisco federal judge late Tuesday granted preliminary approval to a $480 million class action settlement between Wells Fargo and shareholders who alleged they were harmed by the bank’s unauthorized accounts scandal.
Plaintiffs alleged securities fraud, claiming that Wells Fargo executives inflated stock prices by claiming it had great success convincing clients to sign up for additional accounts and services. In fact, the bank created millions of accounts without customer authorization, the Los Angeles Times reports.
The settlement deal was reached in May, and at that time Wells Fargo denied the shareholders’ allegations, according to the Times. The shareholder settlement is open to individuals who purchased Wells Fargo stock between Feb. 26, 2014 and Sept. 20, 2016, according to the Los Angeles Times. Plaintiffs lawyers in the case say they may seek up to $96 million in attorney fees and $3.2 million in costs.
In 2017, it was reported that Wells Fargo has fired 5,300 employees in connection with the unauthorized accounts, and agreed to pay $185 million to settle federal claims. It also replaced its then-general counsel, James Strother.
In April, Wells Fargo agreed to pay a $1 billion fine for alleged violations of the Consumer Financial Protection Act. The bank forced customers with auto loans to buy insurance they didn’t need, and it failed to follow the process it explained to customers concerning payments to lock in mortgage interest rates.