Wells Fargo to Pay $1 Billion to Shareholders in Class-action Lawsuit

Wells Fargo to Pay $1 Billion to Shareholders in Class-action Lawsuit

Wells Fargo & Co. has agreed to pay $1 billion to shareholders as it seeks to settle a class-action lawsuit in connection with the lender’s 2016 unauthorized accounts scandal.

According to reports, the preliminary settlement is set to be approved in the next few months. The suit had accused the bank of overstating its progress in cleaning up after the issues, according to the publication.

As a result of the payment, it ends the lawsuit involving the company and several former executives and a director, who have not been with the company for several years.

Initially, in 2020, Wells Fargo had agreed to pay $3 billion to settle U.S. investigations into more than a decade of widespread consumer abuses.

According to the Department of Justice, investigators had found Wells Fargo’s overly aggressive sales targets led thousands of employees to open millions of bogus accounts for customers and foist other products on them from 2002 to 2016, often by creating false records or misappropriating their identities.

Scandals in Wells Fargo’s consumer operations broke out in 2016, exposing that employees may have opened millions of fake accounts to meet sales goals.

Moreover, the probe revealed, the company’s expenses and new details emerged of additional lapses and wrongdoing surfaced across business lines including mortgages and auto lending.