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Wells Fargo Agrees to Pay $300 Million to Settle With Shareholders Over Auto Insurance Disclosures

  • February 28, 2023

(Reuters) -Wells Fargo & Co agreed to pay $300 million to settle a shareholder lawsuit claiming the bank hid that it had pushed unnecessary insurance on auto loan customers, according to documents filed in U.S. court on Tuesday.

The Construction Laborers Pension Trust for Southern California, which led the class action brought on behalf of investors, said in federal court in San Francisco that Wells Fargo and its former chief executive, Timothy Sloan, had agreed to settle.

The bank did not admit wrongdoing.

The deal requires approval from U.S. Judge James Donato, who is overseeing the case. Trial in the case had been scheduled for Feb. 27.

“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said in a statement.

An attorney who represents Sloan did not immediately reply to a request for comment.

Scott Saham of Robbins Geller Rudman & Dowd, the law firm representing Wells Fargo shareholders, said the settlement “is part of remediating the entire spectrum of harm that you get in a complex fraud case.”

The lawsuit stems from one of the San Francisco-based bank’s past scandals over sales practices that resulted in government investigations and fines.

Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “collateral protection insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.

Shareholders sued in 2018, alleging Wells Fargo misled them when Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank’s sales practices and culture.

The bank also concealed auto insurance issues from the U.S. Senate Banking Committee in November 2016, the investors alleged.

The lawsuit sought damages for investors

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Wells Fargo agrees to pay $300 mln to settle with shareholders over auto insurance disclosures

  • February 25, 2023

Feb 7 (Reuters) – Wells Fargo & Co (WFC.N) agreed to pay $300 million to settle a shareholder lawsuit claiming the bank hid that it had pushed unnecessary insurance on auto loan customers, according to documents filed in U.S. court on Tuesday.

The Construction Laborers Pension Trust for Southern California, which led the class action brought on behalf of investors, said in federal court in San Francisco that Wells Fargo and its former chief executive, Timothy Sloan, had agreed to settle.

The bank did not admit wrongdoing.

The deal requires approval from U.S. Judge James Donato, who is overseeing the case. Trial in the case had been scheduled for Feb. 27.

“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said in a statement.

An attorney who represents Sloan did not immediately reply to a request for comment.

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Scott Saham of Robbins Geller Rudman & Dowd, the law firm representing Wells Fargo shareholders, said the settlement “is part of remediating the entire spectrum of harm that you get in a complex fraud case.”

The lawsuit stems from one of the San Francisco-based bank’s past scandals over sales practices that resulted in government investigations and fines.

Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “collateral protection insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.

Shareholders sued in 2018, alleging Wells Fargo misled them when Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank‘s sales practices and culture.

The bank also concealed auto insurance issues from the U.S. Senate Banking Committee in

Read the rest
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Wells Fargo to pay $300 million to settle car insurance suit

  • February 13, 2023

Wells Fargo & Co. has agreed to pay $300 million to settle a lawsuit claiming it improperly charged customers for unneeded auto-collision protection insurance — and hid the practice from investors.

The deal was announced Tuesday by the law firm that sued the bank after a New York Times investigation revealed that about 274,000 customers were put into delinquency and almost 25,000 vehicles were wrongfully repossessed.

“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a bank spokesperson said in a statement.

Wells Fargo stopped charging customers for the insurance but didn’t tell investors, according to a statement issued by Robbins Geller Rudman & Dowd LLP. The law firm filed a securities-fraud class action alleging that the bank’s stock traded at artificially inflated prices.

Wells Fargo disclosed in a regulatory filing that it had been aware of the problem since 2016, the year before the wellsfargo-unwanted-auto-insurance.html” class=”omnitrack inline-paragraph-link” data-omnilocation=”articlebody” data-omnilink=”editorial-link”2017 New York Times story, according to the statement.

Attorneys for the investors are now seeing court approval of the settlement.

“When companies conceal widespread abusive or unfair business practices that harm their customers, investors often get injured, as well,” Scott H. Saham, a lawyer representing the class, said in the statement.

The case is Purple Mountain Trust v. Wells Fargo & Company, 3:18-cv-03948, U.S. District court for the Northern District of California (San Francisco).

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