2/2/2018 -- 3/12/2020
Class definition: all persons or entities who purchased or otherwise acquired the common stock of Wells Fargo from February 2, 2018 through March 12, 2020, inclusive
Northern District of California, 1:20-cv-04494
In 2016 the Consumer Financial Protection Bureau announced that it would fine Wells Fargo $185 million for fraudulently signing up millions of its customers for checking, savings, and credit card accounts without their consent. After that, the flood: a compensation fund ($142 million), a securities class action ($480 million), a Fair Fund ($500 million), a deferred prosecution agreement with the Department of Justice ($3 billion), a settlement with all fifty state Attorneys General ($575 million)... The list is not exhaustive.
And now, nearly seven years after the CFPB broke the scandal wide open, we have another securities class action settlement—this one more than twice the amount of the initial securities settlement, and based on allegations Wells Fargo has failed to comply with the consent orders to fix the problems that caused the scandal in the first place. Plaintiffs allege that Wells had misled investors into believing it had been meeting the demands of regulators while it barely had a plan in place at all.
Wells Fargo is one of the most widely held stocks in the US. If the idea of filing a vast number of claims or for all of your clients’ accounts give you pause, then you should give us a call. In the previous Wells Fargo securities class action and Fair Funds, Chicago Clearing filed over 100,000 claims for each settlement. Our expert team can handle any type of trade data, figure out any type of trade, and file it in a timely and efficient manner.
After the CFPB fined Wells $185 million, it also slapped it with a consent order—as did the the Office of the Comptroller of the Currency and the Federal Reserve. These orders were intended to both stop deceptive practices and to create an oversite plan to ensure such a scandal did not happen again.
Plaintiffs alleged in their amended complaint that Wells misled investors about its compliance with these orders, when in fact their “overhaul could not even get off the ground. Wells Fargo," plaintiffs wrote, "had yet even to submit to regulators an acceptable plan or schedule and was nowhere near meeting the regulators’ requirements that were a predicate to lifting the severe measures that had been imposed on the Bank. A series of revelations, including damming congressional hearings and reports, finally revealed to the market that the Bank had blatantly disregarded the basic requirements set forth in the 2018 Consent Orders and made numerous misrepresentations to the public about its compliance with those orders.”
While the market did not know about Wells Fargo’s failings, plaintiffs allege, regulators did. Plaintiffs claim that one regulator wrote that the bank’s compliance was ““so inadequate as to raise concerns about the company’s leadership.” Eventually this lack of compliance may have contributed to the departure of CEO, Tim Sloan. He announced his exit from the bank in a 2019 conference call with shareholders. At the time Reuters wrote, “analysts tried unsuccessfully to get a direct answer to whether regulators had given Sloan the final push.” Plaintiffs believe there is a connection: “The Bank’s Regulators," they state in the complaint, "were troubled by Wells Fargo’s public misrepresentations, privately condemning the Bank and specifically its then-CEO, Defendant Sloan, for lying to the public. As a result of this backlash and condemnation, Defendant Sloan was forced to resign.”
Chicago Clearing Corporation has the resources, experience, and expertise to manage complex claims. Despite this being a common-stock only securities litigation, the volume of trades and accounts will make it a complex one for many investors. Give us a call today, and we can help you focus on the markets and not on piles of claims forms.
Wiki run-down of the cross-selling scandal:
Plaintiff’s Consolidated Amended Class Action Complaint:
Reuters, March 28, 2019, “Wells Fargo CEO Tim Sloan steps down”
Case Name: Read More
Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720
Case Name 1: The Kraft Heinz Company
Cornerstone Research has released its yearly securities class action litigation report and found dramatic increases in the number of settlements and in the average settlement pools. (The link to the full report is below.)
Cornerstone focused on federal securities class actions, specifically cases al... Read More
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