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Wells Fargo to Pay $1 Billion to Settle Lawsuit by Shareholders

The New York Times

May 16, 2023

A group of shareholders had claimed that the bank misled investors about its progress in cleaning up after a sham accounts scandal a decade ago.

Wells Fargo has agreed to pay $1 billion to settle a class-action lawsuit accusing the bank of overstating how much progress it had made in fixing the unlawful practices that regulators said had hurt millions of customers.

The agreement, detailed in court filings on Monday, is the latest in a succession of settlements and penalties the bank has paid stemming from a fraud scandal that came to light nearly a decade ago. From 2002 to 2016, bank employees, facing unrealistic sales goals imposed by their bosses, opened millions of accounts in customers’ names without their knowledge.

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“If approved, this settlement will help compensate hundreds of thousands of investors — state employees, nurses, teachers, police, firefighters and others — whose critical retirement savings were impacted by Wells Fargo’s fraudulent business practices,” Steven J. Toll, managing partner at Cohen Milstein Sellers & Toll, which represented the investors in the suit, said in a statement.

The complete article can be read on The New York Times.