Wells Fargo to pay $1 billion to settle shareholder lawsuit – Kommersant

U.S. bank Wells Fargo has agreed to pay $1 billion in a class-action lawsuit from shareholders who accuse it of misleading them about real progress in fixing numerous violations identified by regulators back in 2016, and thereby hurting both shareholders and millions of clients. About the settlement informed The Wall Street Journal.

This agreement is the latest in a long line of settlements and fines related to high-profile scandalwhich erupted in 2016. At that time, the Bureau of Financial Market Consumer Protection discovered Wells Fargo’s “widespread illegal practice” of bank employees opening accounts without the consent of customers, and also imposing services on them that they did not need. This was done to fulfill sales plans and receive bonuses. As a result of the investigation, Wells Fargo fired more than 5 thousand employees involved in these schemes, and also sent to resign CEO John Stumpf. After that, lawsuits fell on the bank from regulators, customers, shareholders, and even from laid-off employees.

The latest shareholder lawsuit concerns 2018-2020, during which Wells Fargo had to fix all issues identified by regulators. And the bank regularly reported to shareholders on its successful resolution of these problems, but, according to the plaintiffs, in fact the bank only “created a false impression” and did not achieve real progress. Moreover, in two years, to March 2020, they point out, the market value of the bank fell by more than $54 billion. Since the beginning of this year, the bank’s shares have lost more than 7% of their value. An agreement to settle the shareholder lawsuit has been filed in federal court in Manhattan.

Alena Miklashevskaya