Federal judge approves final settlement in Wells Fargo investment case

[JURIST] A judge for the US District Court for the District of Minnesota [official website] on Monday approved a settlement for $62.5 million between Wells Fargo & Co [corporate website] and large institutional clients who lost money in an investment program known as securities lending. US District Judge Donovan Frank also awarded attorneys fees to the plaintiffs. The final settlement follows a preliminary settlement and the US Court of Appeals for the District of Columbia Circuit's [official website] rejection in June of Wells Fargo's contention that the bank's participation in the settlement [JURIST reports] should bar claims bring in a separate civil case.

US banking companies [JURIST backgrounder] have been under intense scrutiny in the wake of the 2008 financial crisis. In April the Consumer Financial Protection Bureau (CFPB) [official website] ordered [JURIST report] Bank of America to pay $727 million for its illegal credit card practices. In January a New York state judge approved an $8.5 billion settlement between Bank of America and almost two dozen mortgage securities investors, holding that the 2011 agreement was reached in good faith. Also in January the US Attorney's Office for the Southern District of New York [official website] entered into a deferred prosecution agreement [JURIST report] with JP Morgan Chase & Co [corporate website] which stipulates the bank will pay $1.7 billion to the US government for its role in the Bernard Madoff Ponzi scheme.

 

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