U.S. District Judge Jon S. Tigar of the Northern District of California has issued an order granting final approval to a $320 million settlement that will end shareholders’ derivative litigation relating to Wells Fargo’s unfair sales practices and its widespread fake accounts scandal. Plaintiffs in the suit, including the Fire & Police Pension Association of Colorado and the City of Birmingham Retirement and Relief System, allege that since at least 2011, the Board and executive management of Wells Fargo knew or consciously disregarded that its employees were illicitly creating millions of costly deposit and credit card accounts for their customers, without those customers’ consent, in order to meet the banks’ aggressive sales goals.
The deal between investors in the bank and its current and former top executives represents the largest-ever insurer-funded cash settlement of a shareholders derivative action.
The terms of the settlement call for a $240 million cash payment to be made to Wells Fargo on behalf of the bank’s directors-and-officers liability insurers, and require that the bank make executive compensation cuts, including clawbacks of stock grants and incentive compensation from certain board members and Wells Fargo senior executives, and institute a set of sweeping corporate governance reforms.
Learn more about the Wells Fargo & Company Shareholder Derivative Litigation