Wells Fargo agreed to pay USD 1 billion to its shareholders to settle a class action lawsuit

Following the recent scandal involving financial services company Wells Fargo in fake account openings and subsequent investor class action, the entity agreed to pay $1 billion to settle the case.

This agreement, which is taking place in a federal court in New York, is waiting to be approved, informed the lawyers for the shareholders. Furthermore, it is considered to be one of the latest scandals involving fake bank accounts since 2016.

The reason is that under pressure from the directors of the entity, the workers agreed to open false accounts with the possibility of meeting the assigned objectives. During the hearings, shareholders claimed that bank executives had made false statements.

In a statement, Steven J. Toll, managing partner at Cohen Milstein Sellers & Toll, a law firm representing investors, noted that if approved this settlement “will help compensate hundreds of thousands of investors (state employees, nurses, teachers, police officers, firefighters, and others) whose significant retirement savings were affected by Wells Fargo's fraudulent business practices”, he said.

In 2020, the Financial Services Committee of the House of Representatives published a report in which it was verified that the financial institution had not complied with the consent orders of its clients for the opening of the accounts, which led to that weeks later the company's shares fell 34%.

For its part, Wells Fargo stated that they did not agree with the accusations, however they expressed their satisfaction with the resolution of this matter. “This settlement resolves a consolidated securities class action lawsuit involving the company and several former executives and a director, who have not been with the company for several years,” the banking institution said.