SAN FRANCISCO–Wells Fargo has announced it will pay shareholders $480 million to settle claims related to its phony accounts scandal.
As CUToday.info has reported previously, the bank has acknowledged that in the years leading up to 2016 its employees opened approximately 3.5 million unauthorized accounts as they sought to meet aggressive sales quotas.
“We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders,” Wells Fargo CEO Tim Sloan said in a statement. “We are making strong progress in our work to rebuild trust, and this represents another step forward.”
Suit Filed Two Years Ago
The lawsuit’s lead plaintiff, Gary Hefler, originally filed suit against Wells Fargo in September 2016 claiming the bank had misled investors about nonexistent accounts that eventually cost it more than $300 million in penalties and untold reputational harm.
Moreover, alleged the plaintiffs, the board had previously been put on notice about the bogus accounts by “numerous red flags,” including warnings from employees, prior litigation, internal reports, investigations by regulators, and an L.A. Times investigation in 2013.
Wells Fargo has since paid more than $1 billion in fines for the account-opening scandal and numerous others and is operating under a growth cap put in place by the Federal Reserve.