A federal judge in San Francisco has signed off on a $480-million settlement in a class-action shareholder lawsuit over Wells Fargo’s unauthorized-accounts scandal.
The deal, granted preliminary approval late Tuesday, would compensate Wells Fargo & Co. shareholders for losses they suffered after the bank in 2016 acknowledged it had created perhaps millions of accounts without customers’ authorization.
Shareholders, including lead plaintiff Union Asset Management, sued for securities fraud, arguing that executives had inflated the bank’s stock price by claiming for years that Wells Fargo was a leader in so-called cross-selling — getting customers to sign up for numerous accounts and services.
Executives continued to tout the practice, the defendants argued, even after it became clear that aggressive sales goals and quotas were “corrupting, rather than reinforcing, Wells Fargo’s purported corporate values and cross-selling business model.”
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