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Wells Fargo Settles Securities Suit for $300 Million

Plaintiffs allege that Wells's Improper Auto Insurance Sales drove stock price down



Case Name: Wells Fargo 2018 Litigation

Settlement Fund: $300,000,000

Claim Filing Deadline: TBD

Class Period: 11/3/2016 -- 8/3/2017


Chicago Clearing Corporation is tracking a new $300 settlement with Wells Fargo. As of today (2/23/23) proof of claim forms and notices are not yet available, but recovery could be substantial. Plaintiff attorneys claim in their motion for preliminary approval of the settlement that the fund "recovers approximately 31%-47% of the estimated aggregate damages as calculated by Lead Plaintiff’s damages expert. This is a tremendous result." If these numbers pan out, it would indeed be a substantial opportunity for investors who lost money way back in the summer of 2017.

Before we get into the weeds of this case, a few questions:

Do you need help finding all the trade data for all your clients and all of your accounts? Do you have the time to file claims properly? Might you want to sell your claim now, without having to wait many more months or even years for a recovery?

Whatever your situation, CCC is on your side. Our experts can help every type of investor keep up with the class action world. From the retail investor to the hedge fund, from brokerages to bank trust departments to RIAs, our clients rest easy knowing the team  at CCCis keeping an eye on the class action world from the moment a complaint is filed until a fund has fully distributed. Call us today and we can help you recover funds in Wells Fargo and hundreds of other cases.

So what’s this case all about?

On July 27, 2017, the New York Times reported that an internal review commissioned by Wells Fargo found that the bank had charged over 800,000 people for auto-insurance they did not need. Nearly 274,000 customers wound up delinquent and 25,000 vehicles were repossessed. 

The plaintiff’s wrote in their initial complaint that, “Following publication of this article, Wells Fargo’s share price fell $1.41, or 2.58%, to close at $53.30 on July 28, 2017.” A week later on August 4, Wells issued its Form 10-Q for the second quarter, disclosing that the legal costs related to this and other scandals could reach $3.3 billion. Upon this news the stock fell further, “as low as $51.91 per share on August 4, 2017,” the plaintiffs claimed in their consolidated complaint, “before closing at $52.84 per share – again on unusually high trading volume of more than 44.6 million shares.”

Investors began their securities litigation against Wells in 2018, alleging that executives knew the company had been improperly charging its customers, concealed the practice, and thereby artificially inflated the price throughout the class period. On August 15, 2022 the court certified the class; the exclusion deadline recently passed on January 26. Finally on February 7, parties informed the court they had settled. 

While the defendants continue to deny the allegations, in late December the Consumer Financial Protection Bureau ordered the bank to pay $3.7 billion, “for widespread mismanagement of auto loans, mortgages, and deposit accounts.” $2 billion of this will be in consumer redress with the remaining $1.7 billion in civil penalty.

As noted above, claim forms are not yet available. However, CCC’s team can analyze the preliminary plan of allocation as filed in the preliminary approval motion before the court and discuss possible recognized loss and settlement awards today. Feel free to give us a call at any time to discuss this or any of the hundreds of litigations we participate in.


News:

https://www.cnbc.com/2022/12/21/wells-fargo-settlement-includes-2-billion-for-customers-what-to-know.html

https://www.reuters.com/legal/wells-fargo-agrees-pay-300-mln-settle-with-shareholders-over-auto-insurance-2023-02-07/

https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts/

Case website:

http://www.wellsfargo2018securitieslitigation.com/

As of this writing, notices and claim forms are not available, but will be found here and on the CCC client website once the administrator posts them.



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