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Settlement for $62.5 Million Approved in Wells Fargo Case
Summary: Wells Fargo settles securities lending case for $62.5 million.
In the latest update from Jurist, the U.S. District Court for the District of Minnesota approved a settlement for $62.5 million on Monday in a case filed against Wells Fargo. The lawsuit was filed against Wells Fargo after the plaintiffs, large institutional clients, lost money in an investment program known as securities lending. The judge, the Honorable Donovan Frank, also awarded attorneys’ fees to the plaintiffs.
A preliminary settlement had previously been agreed upon by the parties. The U.S. Court of Appeals for the District of Columbia rejected Wells Fargo’s argument that the bank’s participation in that settlement should serve as a bar for separate civil cases in June. Wells Fargo, as well as several other national banks, argued that a $25 billion settlement with the government over foreclosure abuse should bar any additional civil suits. Their position was rejected primarily because the settlement did not respond to allegations in a separate civil suit.
Courts have cracked down on banking companies in the United States since the financial crash of 2008. In January, a massive $8.5 billion settlement was approved between Bank of America and over 20 mortgage securities investors. The judge’s approval hinged on his determination that the 2011 agreement was negotiated in good faith. That same month, a deferred prosecution agreement was entered into by the U.S. Attorney’s Office for the Southern District of New York and JP Morgan Chase & Company. The agreement stipulated that JPMorgan would pay $1.7 billion to the United States for its involvement in the infamous Bernie Madoff Ponzi scheme that cost investors billions of dollars.
In April, Bank of America was ordered to pay $727 million for illegal credit card practices.
Photo credit: Wikipedia$62.5 Million Settlement Approved in Case Against Wells Fargo by Noelle Price