Wells Fargo reaches $1 billion settlement with shareholders over recovery from scandals | CNN Business (2024)

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Wells Fargo reaches $1 billion settlement with shareholders over recovery from scandals | CNN Business? ›

NEW YORK, NY – Today, Co-Lead Plaintiffs and Co-Lead Counsel Cohen Milstein Sellers & Toll PLLC announced that they have reached a $1 billion settlement with Wells Fargo (NYSE: WFC) in a securities fraud class action lawsuit, which is subject to court approval to be sought in the coming weeks.

Since the scandal broke, Wells Fargo overhauled its board of directors and management, paid more than a billion dollars in fines and penalties, and has spent eight years trying to show the public that the bad practices are a thing of the past.

As a result of defendants' false statements and/or omissions during the Class Period, Wells Fargo stock traded at artificially inflated prices, reaching a high of over $58 per share and allowing certain defendants to sell more than $31 million worth of their own Wells Fargo stock at artificially inflated prices.

For automobile repossessions, compensation is “at least,” but is not limited to, $4,000. For mortgage holders that were unable to modify their mortgages to avoid foreclosure, damages average $24,125 per claimant. For deposit accounts, customers average $100 in damages.

WASHINGTON (AP) — Wells Fargo has agreed to a pay $1 billion to settle a lawsuit filed by its shareholders who alleged the bank made misleading statements about its compliance with federal regulators after a fake account-opening scandal came to light in 2016.

NEW YORK, NY – Today, Co-Lead Plaintiffs and Co-Lead Counsel Cohen Milstein Sellers & Toll PLLC announced that they have reached a $1 billion settlement with Wells Fargo (NYSE: WFC) in a securities fraud class action lawsuit, which is subject to court approval to be sought in the coming weeks.

More specifically, Wells Fargo customers who had either an auto loan, mortgage loan or bank account between 2011 and 2022 were affected and may be eligible for a payout.

Wells Fargo reached a settlement with the federal government to pay out $1.8 billion for falsely underwriting millions of home mortgage loans prior to 2008 that should have never been eligible for Federal Housing Administration insurance.

None went to prison as a result of the 2008 global financial crisis. Prosecutors had sought a one-year prison term. The actual sentence mirrored Tolstedt's request, and she accepted "full responsibility" for her crime. A lawyer for Tolstedt declined to comment.

The bank posted $2 billion in operating losses related to litigation, customer remediation, and regulatory matters associated with the now six-year-old scandal over its sales practices.

How far back does the Wells Fargo lawsuit go? ›

On May 4, 2015 the Los Angeles City Attorney filed suit against Wells Fargo claiming violations of California's Unfair Competition Law (B&P Code, §17200).

In 2022, Wells Fargo agreed to pay $3.7 billion in fines and restitution in a settlement with the CFPB to fix issues related to auto lending, mortgages and consumer deposit accounts.

December 2022The Consumer Financial Protection Bureau ordered Wells Fargo to pay $2 billion in refunds to over 16 million customers—as well as $1.7 billion in penalties—for charging illegal fees and interest on auto and mortgage loans, incorrectly repossessing customers' cars, mismanaging auto and mortgage loan ...

The CFPB said the more than $2 billion in customer refunds Wells Fargo has been ordered to pay includes more than $1.3 billion to consumers hurt by the bank's auto lending tactics and more than $500 million for illegal surprise overdraft fees and other misconduct related to deposit accounts.

Shareholders involved in the lawsuit include pension funds in Louisiana, Rhode Island and Mississippi and Swedish investment firm Handelsbanken Fonder.

December 2022: The CFPB orders Wells Fargo to pay $1.7 billion in fines and $2 billion in consumer redress in connection with "illegal activity" across several of its product lines.

The bank posted $2 billion in operating losses related to litigation, customer remediation, and regulatory matters associated with the now six-year-old scandal over its sales practices.

The company settled with the Consumer Financial Protection Bureau in December, agreeing to pay customers $2 billion and a record $1.7 billion fine for "widespread mismanagement" over multiple years that harmed over 16 million consumer accounts. Wells Fargo's fake accounts scandal created a national firestorm in 2016.

Carrie Tolstedt, pictured in 2010, was the head of the Wells Fargo banking unit that opened millions of fraudulent accounts.