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- Citigroup Raises CEO Corbat's Pay 48% to $23Mn
- Should Congress Create a Crypto-Cop?
- JPMorgan Weighs Buying an Exchange-Traded Funds Firm
- Hey, Goldman Sachs: Wanna Buy BNY Mellon?
- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
- FINRA Looking Into VIX (CBOE Volatility Index) Manipulation: WSJ
- Atlanta-Area Resident Charged with Misusing Investor Funds - SEC
- FINRA Announces 2018 West Region Networking Seminar
- Alberto Arevalo, Associate Director in Office of International Affairs, to Retire From SEC
- A Culprit for Financial Site Glitches: You and Your Apps
- Investor Protection, Capital Formation and Market Integrity Are Top Priorities in SEC Budget Request
- We Must Stop Out-Of-Control Trading or U.S. Capitalist System Will Break Down - Dick Bove
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NEWSLETTERS & ALERTS
Wells Fargo’s $110Mn Class Action Settlement – Does This Sound Cheap?
Wells Fargo announced that it has agreed to pay $110 million (after attorneys’ fees) to settle a class-action lawsuit relating to the 2 million or so accounts that bank employees opened without customer permission, going back to 2009. Under terms of the settlement, Wells Fargo would also waive its right to take customers into ‘third-party’ arbitration. This settlement, which is subject to court approval, would apparently resolve 11 other pending class-action lawsuits filed against Wells Fargo in this matter.
It’s the first private settlement that Wells Fargo has reached since September 2016, when the bank agreed to pay $185 million in fines to settle to charges filed by federal and California authorities. And then there’s $3.2 million in payments that tge babnk has already made customers who reportedly had 130,000 accounts opened without their permission. In most cases, these customers (who received a remediation check) will be eligible to take part in the $110million settlement.
“We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option. We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.” - - Wells Fargo CEO Tim Sloan, in a statement.
HOW DOES THE SETTLEMENT BENEFIT CUSTOMERS? A lawyer with Keller Rohrback, one of the firms that filed the class-action suit against Wells Fargo praised the settlement: “We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo’s effort to block the class action with an arbitration clause.”
Really? The numbers on the table seem rather low for remediation to customers- at least to this layman’s eyes. Let’s work out the numbers: $110Mn among 2,000,000 accounts equals $55 per account; $3.2Mn payouts for 130,000 accounts equals $25 per account.
How might that begin to compensate customers who have endured credit rating problems, or customers who worried needlessly and spent untold hours to process account closures?
Of course, the bank faces additional legal obstacles –regulatory and criminal investigations, and lawsuits by investors and former employees. All these may result in significantly higher payments by the bank. But of course, they would not necessarily end up in the pockets of customers – who, along with fired employees, have borne the greatest losses in the entire scandal.
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