Financial services company Wells Fargo has settled in a class action lawsuit, agreeing to pay $1 billion to its shareholders.
The lawsuit alleges that the bank misled its shareholders in its efforts to resolve the fraudulent account scandal that emerged in 2016. The $1 billion all-cash settlement was pre-approved by United States District Judge Gregory Woods in Manhattan federal court. A further hearing will be held on September 8 for final approval.
Wells Fargo: We Are Happy To Resolve
In a statement on the subject, the bank stated that it did not agree with the allegations made in the case and that it was pleased to have resolved this issue.
Wells Fargo had reached a $3.7 billion settlement with the Consumer Financial Protection Bureau in December 2022 to settle accusations that the bank’s actions had damaged more than 16 million people. At that time, Ripple CEO Brad Garlinghouse compared the Wells Fargo issue to the bankruptcy of FTX. The CEO expressed his concern over the lack of attention given to the Wells Fargo case, emphasizing that the bank mismanaged billions of client funds.
Similar concerns were recently raised by Reddit users. On May 17, a Reddit user said that the U.S. Securities and Exchange Commission should also examine banks.
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