Financial services company Wells Fargo has settled a class action lawsuit, agreeing to pay $1 billion to its shareholders.
The suit says the bank misled its shareholders as it tried to resolve a fraudulent accounts scandal that emerged in 2016. The $1 billion all-cash settlement was pre-approved by U.S. District Judge Gregory Woods in Manhattan federal court. A further hearing for final approval will be held on September 8.
Wells Fargo: We’re happy to resolve
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In a statement on the subject, the bank said it disagreed with the allegations in the case and was pleased to have resolved the matter.
Wells Fargo reached a $3.7 billion settlement with the Consumer Financial Protection Bureau in December 2022 to settle allegations that the bank’s actions harmed more than 16 million people. At the time, Ripple CEO Brad Garlinghouse compared Wells Fargo’s problems to FTX’s bankruptcy. The chief executive expressed concern over the lack of attention in the Wells Fargo case, highlighting the bank’s mismanagement of billions in customer funds.
Reddit users recently raised similar concerns. On May 17, a Reddit user suggested that the SEC should also scrutinize banks.
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