Wells Fargo will pay $480 million to resolve an investor class-action suit against the company, it was announced on Friday.
The claims stemmed from allegations that the company, which is publicly traded, violated federal law by failing to inform shareholders after learning that regulators were investigating the bank’s creation of phony customer accounts.
Federal law requires public companies like Wells Fargo to warn shareholders about non-routine legal matters, yet Wells Fargo acknowledged staying silent for at least six months after learning that regulators were investigating the unauthorized accounts. Wells Fargo was already aware of the issues surrounding the unauthorized accounts by March 2016 but kept its investors in the dark until September 2016, when the story became public.
As blogged about in this space last fall, Wells Fargo has been the subject of multiple regulatory actions and lawsuits in the past year, based on the creation of phony bank and credit card accounts, enrollment of customers in online bill pay without their authorization, and its failures to supervise Wells Fargo representatives in their recommendation of investments in volatility-linked exchange-traded products.
If you or someone you know has lost money as a result of a Wells Fargo-recommended investment that was unsuitable for you or was misrepresented to you by your broker/financial advisor, please call the Frankowski Firm at 888.741.7503 or fill out this contact form.