“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said. — Reuters
SAN FRANCISCO: Wells Fargo and Co agreed to pay US$300mil (RM1.29bil) to settle a shareholder lawsuit claiming the bank hid that it had pushed unnecessary insurance on auto loan customers, according to documents filed in US court.
The Construction Labourers Pension Trust for Southern California, which led the class action brought on behalf of investors, told a federal court in San Francisco that Wells Fargo and its former chief executive, Timothy Sloan, had agreed to settle.
The bank did not admit wrongdoing.
The deal requires approval from US Judge James Donato, who is overseeing the case. The trial in the case had been scheduled for Feb 27.
“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said in a statement.
An attorney who represents Sloan did not immediately reply to a request for comment.
The lawsuit stems from one of the San Francisco-based bank’s past scandals over sales practices that resulted in government investigations and fines.
Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “collateral protection insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.
Shareholders sued in 2018, alleging Wells Fargo misled them when Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank’s sales practices and culture. — Reuters
