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- Address at ICI's 2017 Securities Law Developments Conference - SEC Commissioner Stein
- New York Pension Fund Seeks More Pay Disclosure from Wells Fargo
- Wells Fargo Sanctions Are on Ice Under Trump Official
- Josh Brown: Here's How to Buy Bitcoin, But Realize It Could Be One Giant Bubble
- Trump's New Tax Plan Could Cost Citigroup $20 Billion
- Morgan Stanley Fires Former Congressman Harold Ford Jr.
- Al Franken Will Resign Over Sexual Misconduct Allegations - His Full Resignation Speech
- Ex-NFL Player Gets 40 Years for Running $10Mn Fraud
- Bitcoin Blows Past $15K, Adding $2K in Under 12 Hours
- Financial Adviser Settles Charges for Defrauding Private Equity Fund Investors
- New Cross Market Equity Supervision Report Cards - FINRA Phone-In Workshop, WebEx Presentation
- Mueller Just Crossed Trump's Red Line, With Deutsche Bank Subpoena
- Wildfire Rages Near Los Angeles
- Former Company Insider Has $4.1Mn Payday as a Whistleblower
- Audit Firm, Anton & Chia, Conducted Fraudulent Audits of Penny Stock Companies - SEC
- Mueller Subpoenas Deutsche Bank Records on Trump and Family
- Bitcoin Nearly Halfway to $400Bn Value Predicted by Winklevoss Twins 4 Years Ago
- Fidelity Clients Suffer Second Website Glitch in Week
- CBOE Beats CME to Bitcoin Futures Launch with December 10 Start
- McKinsey Senior Exec Thomas Barkin Named New Head of Federal Reserve Bank of Richmond
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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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