Wells Fargo & Co. agreed to pay $1 billion to shareholders as it seeks to settle a class-action lawsuit in connection with the lender’s 2016 unauthorized accounts scandal, the Wall Street Journal reported.
The preliminary settlement, disclosed in a court filing Monday, has to be approved in the next few months, according to the report. The suit had accused the bank of overstating its progress in cleaning up after the issues, according to the publication.
The payment ends a lawsuit “involving the company and several former executives and a director, who have not been with the company for several years. While we disagree with the allegations in this case, we are pleased to have resolved this matter,” a Wells Fargo spokesperson told the Wall Street Journal.
In 2020, Wells Fargo agreed to pay $3 billion to settle U.S. investigations into more than a decade of widespread consumer abuses. Investigators found Wells Fargo’s overly aggressive sales targets led thousands of employees to open millions of bogus accounts for customers and foist other products on them from 2002 to 2016, often by creating false records or misappropriating their identities, the Department of Justice said at that time.
Scandals in Wells Fargo’s consumer operations erupted in 2016 with the revelation that employees may have opened millions of fake accounts to meet sales goals. The company’s expenses surged as new details emerged and as additional lapses and wrongdoing surfaced across business lines including mortgages and auto lending.
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