- 1440 Daily Digest
Wells Fargo Settlement
Wells Fargo & Co. has agreed to pay $1B to settle a shareholders' lawsuit from its 2016 unauthorized customer accounts scandal. If approved, the payout will be one of the top 20 largest class-action settlements in history.
The lawsuit accused the bank's executives of publicly exaggerating the progress made in fixing its governance issues and risk-management systems while downplaying a $54B market value decrease between 2020 and 2022. A report from the House Financial Services Committee in March 2020 found the company failed to comply with consent orders, which the shareholders claim resulted in a 34% drop in the bank's stock in a little over a week. See the history of the bank's scandals here.
Wells Fargo has already paid billions of dollars in fines and settlements, including $300M in February for improperly charging customers for auto insurance, $3.7B in December to resolve US investigations into consumer abuses, and a guilty plea from a former executive who oversaw the fake account scheme.