Bank Regulation

Wells Fargo Receives Approval To Settle $142M Suit

Wells Fargo

After receiving preliminary approval for a settlement last July, Wells Fargo said that it has received final approval from a California court to settle a class action suit. The $142 million suit sought to compensate customers impacted by a sales scandal, Reuters reported.

Wells Fargo Chief Executive Officer Tim Sloan called the announcement “a significant step forward in making things right for our customers and restoring trust [of all] Wells Fargo’s stakeholders.” To claim funds, customers have until July 7.

Wells Fargo announced in May that it had agreed to pay $480 million to settle a securities fraud class-action suit. In a press release, the embattled bank said the lawsuit was filed in the U.S. District Court for the Northern District of California, sparked by misstatements and omissions in its discourse related to sales practices. The $480 million fine is subject to a final approval by the court.

Wells Fargo has denied the claims and allegations in the action, and entered into the settlement to avoid the costs and disruption of further lawsuits.

“We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders,” Sloan said in a May press release. “We are making strong progress in our work to rebuild trust, and this represents another step forward.”

As Wells Fargo is settling this case, the hits keep coming to the national bank. Most recently, the Department of Labor is determining whether Wells Fargo pushed retirement-planning customers into pricier accounts and toward buying more expensive investment funds in order to generate more fees for itself. As The Wall Street Journal has reported, the bank has pressed employees to move clients into more expensive individual retirement accounts (IRAs) when they retired or left jobs that provided them with 401(k) accounts.

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