Financial services company Wells Fargo has settled a class action lawsuit, agreeing to pay shareholders $1 billion. The lawsuit alleged that the bank had misled its shareholders about its efforts to resolve the 2016 fake account scandal.
District Judge Gregory Woods of a Manhattan federal courthouse preliminarily approved a $1 billion cash settlement. Another hearing will be held on September 8 for final approval.
It’s a statement, the bank said it disagreed with the allegations made in the lawsuit. On the other hand, although he does not agree with the accusations, he is “delighted to have resolved this matter.”
In December 2022, Wells Fargo also reached a $3.7 billion settlement with the Consumer Financial Protection Bureau to resolve allegations that the bank’s actions had harmed more than 16 million people with deposit accounts, home loans, cars and mortgages.
At the time, Ripple CEO Brad Garlinghouse compared the Wells Fargo affair to the FTX collapse. According to Garlinghouse, the world was outraged by FTX, which he considered “appropriate”. However, the CEO expressed concern about the lack of attention to the Wells Fargo case, noting that it also “mismanaged billions in client funds.”
Community members recently raised similar concerns on a recent Reddit forum. On May 17, a Redditor said that the US Securities and Exchange Commission should also investigate banks. They wrote:
“People put their hard-earned money in a bank thinking it’s 100% safe, take out home and car loans only to get scammed.”
The community member also argued that the banks had violated the regulation multiple times each year, but “the SEC has been pretty quiet” about it. Another Redditor echoed the sentiment, saying it’s “a no-brainer that banks mostly get a pass.”
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