Glancy Prongay & Murray LLP (“GPM”) announces an investigation on behalf of Wells Fargo & Company (“Wells Fargo” or the “Company”) (NYSE: WFC) investors concerning the Company and its officers’ possible violations of federal securities laws. To obtain information or aid in the investigation, please visit the Wells Fargo investigation page on our website at www.glancylaw.com/case/wells-fargo-company.
On July 27, 2017, Wells Fargo disclosed that it would pay approximately $80 million in remediation to customers that may have been financially harmed by the Company’s Collateral Protection Insurance (“CPI”) policies. Wells Fargo stated that “customers may have been charged premiums for CPI even if they were paying for their own vehicle insurance, as required, and in some cases the CPI premiums may have contributed to a default that led to their vehicle’s repossession.”
The company led by the American billionaire Koch brothers, along with dozens of banks and fund managers, kept billions of dollars in profit fromBernard L. Madoff’s Ponzi scheme in accounts offshore. As it turns out, that was a good decision.
Koch Industries and others who invested in the Madoff fund from offshore accounts won a key ruling in federal bankruptcy court on Monday, when the judge said certain funds held abroad — estimated at about $2 billion — could not be made available to victims of the Madoff scheme.
The ruling highlights the tug-of-war that has been raging between those who lost money when the scheme fell apart eight years ago and those who walked away before the fraud came to light, having recouped their original investments and then some.
Treasurer Magaziner Co-files Shareholder Proposal Calling on Wells Fargo to Address Unacceptable Consumer Fraud
Rhode Island has joined a group of institutional investors filing a shareholder proposal demanding Wells Fargo (NYSE:WFC) address recent revelations of widespread consumer fraud and take steps to protect customers and shareholders from illegal predatory banking going forward, General Treasurer Seth Magaziner announced today.
“Wells Fargo allowed millions of Americans to fall victim to widespread fraud and the full extent of the damage to their customers, employees, and shareholders is still unknown,” said General Treasurer Seth Magaziner. “On behalf of Rhode Island taxpayers and members of the State’s pension system, we are entitled to know what Wells Fargo allowed to happen and what steps they are taking to ensure that it can never happen again.”
Thousands of Wells Fargo employees are alleged to have illegally opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for employees and managers. In September of 2016, Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau. This is only the latest in a series of penalties for charges of long-term widespread fraud, ethical lapses and discrimination within the company.
“The Employees’ Retirement System of Rhode Island believes that economic and financial prosperity are rooted in ethical businesses practices,” writes Treasurer Magaziner in a letter to Wells Fargo. “A full accounting of the root causes of widespread fraudulent activity at the company and a clear plan for corrective action going forward will go a long way toward rebuilding trust and increasing shareholder value.”
Wells Fargo & Co.’s board was accused of breaching its duty to investors in a lawsuit that also names Carrie Tolstedt, the executive whose community banking unit created unauthorized customer accounts to reap extra fees.
The suit adds to the mounting pressure on Wells Fargo and Chief Executive Officer John Stumpf since the bank agreed Sept. 8 to pay $185 million in fines and penalties to resolve regulators’ allegations it created more than 2 million deposit and credit-card accounts without customers’ authorization. Analysts and congressional leaders have called for the bank to claw back Tolstedt’s compensation and for Stumpf to resign.
Board members’ refusal to scale back Tolstedt’s retirement benefits is “a breach of their fiduciary duties to shareholders,” according to the complaint, which may be the first such investor case. The suit, in which Stumpf is a defendant along with Tolstedt and the board, asks a San Francisco state court judge to bar the bank from making additional payments to Tolstedt before her retirement slated for the end of the year.
MANHATTAN (CN) — This past spring, UBS faced a trial over $2 billion in investor damages related to the 2008 housing crisis, but an order issued Tuesday clears a path for a smaller penalty.
Three trusts represented by U.S. Bancorp have spent for four years trying to hold the Zurich-based UBS liable for breaching warranties on over 12,000 of approximately 17,000 mortgage loans originally pooled.
On the road to trial, the trusts dropped their estimates to more than 9,800 loans that they claimed to be defective, and the case finally went to a bench trial before U.S. District Judge Kevin Castel from April 18 to May 13 this year.
Four UBS managers and traders took the stand along with one of the trust’s executives and experts from both parties. The banks and trustees also submitted two terabytes of data — including thousands of loan files — for the court’s review.
After digesting the enormous record over the summer, Castel issued a 239-page ruling clearing the bank of turning a blind eye toward the loans’ deficiencies.
“The trusts have not established that UBS was willfully blind to widespread breaches of warranties across the loans in the three trusts,” he wrote.
UBS manager Jonathan Lantz testified that the bank had “ceased its surveillance operations around the same time that it wound down its business of structuring and selling [residential mortgage-backed securities] pools,” according to the ruling.
But Castel also found that UBS would have to repurchase or pay damages for 13 out of 20 loans that he examined, described in the ruling as “exemplar loans.”
Thousands of other loans still need to be reviewed.
Law360, Los Angeles (August 12, 2016, 10:12 PM ET) — A New York state judge on Friday granted approval of a $4.5 billion settlement to resolve institutional investors’ claims that JPMorgan & Chase Co. misled consumers into buying risky residential mortgage-backed securities in the lead-up to the financial crisis in 2007, saying a lone objector’s argument lacked merit.
New York Supreme Court Judge Marcy S. Friedman found that the 2013 deal to resolve claims brought by holders of the securities backed by subprime mortgages that went bust during the financial crisis was negotiated in good faith…
Aug. 5 — Citigroup Inc. investors can’t revive a lawsuit alleging they were wrongfully induced to hold on to company stock during the financial crisis, the U.S. Court of Appeals for the Second Circuit ruledAug. 5 ( AHW Inv. P’ship v. Citigroup Inc., , 2016 BL 253579, 2d Cir., No. 13-4488-cv(L), 8/5/16 ).
The stockholders claimed that the bank made fraudulent and negligent misrepresentations about residential mortgage-backed securities between May 2007 and March 2009. The plaintiffs alleged that they lost more than $800 million by holding on to their stock because of the misstatements.