Wells Fargo to settle shareholder lawsuit for $1B

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Wells Fargo settlement overview: 

• Who: Wells Fargo has agreed to pay $1 billion to end claims brought by shareholders. 
• Why: Shareholders claimed Wells Fargo repeatedly made misleading statements to them about its compliance with federal regulators investigating its role in a fake-account opening scheme that was brought to light in 2016. 
• Where: The Wells Fargo settlement is nationwide. 
• What are my options: Try EnerBank for home improvement lending options.

Wells Fargo has agreed to pay $1 billion to resolve claims it misled shareholders about its compliance with federal regulators investigating the bank over a fake-account opening scheme that surfaced in 2016.

Since the scandal — which involved Wells Fargo employees opening millions of illegal accounts — came to light, the bank has repeatedly been sanctioned by federal regulators over alleged violations of consumer protection laws, reports ABC News. 

The scheme reportedly involved Wells Fargo employees opening illegal accounts as a way to meet irrational sales goals, with the inflated sales figures ultimately causing the bank’s stock to become artificially inflated. 

The actions of the Wells Fargo employees also allegedly damaged customers’ credit scores and injured some consumers financially, on account of subsequent fees, reports ABC News. 

Shareholders, meanwhile, reportedly argued Wells Fargo and its senior executives repeatedly misled them between May 2018 and March 2020 by allegedly stating federal regulators were satisfied with the banks’ progress under consent orders and that the asset cap placed on it would be removed in a timely fashion. 

Wells Fargo remains under Federal Reserve order not to grow its business

As it stands, Wells Fargo remains under order by the Federal Reserve not to grow its business prior to the agency determining the bank’s internal oversight problems have been adequately resolved, reports ABC News.  

The order was reportedly originally put in place in 2018, and, at that time, was only expected to remain in effect for one or two years, however Wells Fargo has reportedly since been found to have committed additional consumer protection law violations. 

Wells Fargo has also paid billions of dollars in fines to federal and state regulators since the scandal, according to ABC News, which reports the bank has also since reshuffled its board of directors and seen two CEOs — along with other top-level executives — leave the company. 

A separate class action lawsuit was filed against Wells Fargo last month by consumers arguing the bank knowingly allowed scam-running companies to open bank accounts with them. 

Also last month, Wells Fargo sought to dismiss a class action lawsuit accusing the bank of falsely promising that it would interview diverse job candidates. 

Were you impacted by the Wells Fargo fake-account opening scandal? Let us know in the comments! 

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