Cohen Milstein Helps Secure Historic $1 Billion Settlement in Wells Fargo Securities Class Action
Cohen Milstein Helps Secure Historic $1 Billion Settlement in Wells Fargo Securities Class Action
Co-Lead Counsel Cohen Milstein led the litigation on behalf of investors
NEW YORK, NY – Today, the Honorable Jennifer L. Rochon of the United States District Court for the Southern District of New York granted final approval of a $1 billion settlement with Wells Fargo (NYSE: WFC), ending a three-year securities fraud class action lawsuit brought on behalf of investors nationwide. The $1 billion settlement is the 17th largest securities class action settlement of all time.
“Investors suffered significant losses as a result of Wells Fargo’s fraudulent business practices,” said Steven J. Toll, managing partner at Cohen Milstein Sellers & Toll. “This historic settlement will help compensate the hundreds of thousands of investors whose retirement savings were impacted.”
“This extraordinary settlement demonstrates how critical institutional investors are to keeping the banking industry and securities markets honest. Our economy depends on the integrity of these industries,” said Laura H. Posner, partner at Cohen Milstein Sellers & Toll, who oversaw the litigation. “We are honored to have helped achieve this landmark settlement.”
Originally brought in June 2020, investors alleged that between May 30, 2018 and March 12, 2020, the bank and its top executives made false and misleading statements to the public and Congress regarding issues of critical concern to its investors: its compliance with consent orders imposed by the federal government after the bank’s 2016 consumer scandal involving the opening of unauthorized customer accounts, as well as when regulators would lift the asset cap they had imposed on Wells Fargo that limited the bank’s growth.
In 2018, Wells Fargo entered into consent orders with the Federal Reserve Board, Office of the Comptroller of the Currency, and Consumer Financial Protection Bureau, to rectify governance and oversight failures that had allowed systemic fraudulent practices to occur at the bank, including opening millions of unauthorized bank accounts and charging hundreds of thousands of borrowers for unnecessary insurance. Additionally, the Federal Reserve Board issued an unprecedented asset cap prohibiting Wells Fargo from expanding its assets until it had fully complied with its consent order.
Following entry into the consent orders, plaintiffs allege that Wells Fargo’s senior executives repeatedly told investors that regulators were satisfied with the bank’s progress under the consent orders and that the asset cap would be timely removed. In fact, the federal regulators repeatedly rejected the bank’s plans. As a result of the bank’s alleged false and misleading statements and omissions, shares of Wells Fargo common stock traded at artificially inflated prices, causing investors to pay more for the stock than it was worth.
The truth was ultimately revealed in a series of disclosures culminating in March 2020, when both the Democratic majority and Republican minority of the House Financial Services Committee released lengthy reports and held hearings demonstrating that Wells Fargo was not in compliance with the consent orders and had not taken the steps necessary to satisfy its obligations.
Court-appointed Lead Counsel in this case are Cohen Milstein Sellers & Toll PLLC and Bernstein Litowitz Berger & Grossmann LLP.
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About Cohen Milstein Sellers & Toll
Cohen Milstein Sellers & Toll PLLC is a premier U.S. plaintiffs’ law firm, with over 100 attorneys handling high-profile and precedent-setting litigation. Through creative and tenacious advocacy, Cohen Milstein has recovered billions of dollars for defrauded investors. For more information visit www.cohenmilstein.com.
Press Contact: Tess Roy tess.roy@berlinrosen.com