Friday, August 22, 2014
$62.5 million settlement approved in Wells Fargo securities lending case
Final approval was given Monday to a $62.5 million settlement between Wells Fargo and clients who lost money in a complicated investment program known as securities lending. As part of the settlement, U.S. District Judge Donovan Frank awarded attorneys representing those clients nearly $23 million in fees and expenses.
The agreement is the third of five lawsuits to be resolved involving Wells Fargo and its investment program. In 2012, a jury in Ramsey County awarded $57 million to several charitable organizations. Last year, San Francisco-based Wells Fargo & Co. prevailed in a jury trial in federal court.
Plaintiffs in the cases, including the one that settled Monday, claimed that Wells Fargo lost money for its clients by allegedly investing in complicated and risky ventures with collateral from securities owned by the clients that were loaned to brokers.
The settlement approved Monday was a class-action lawsuit involving 92 members. The lead clients were a public employee pension fund for the city of Farmington Hills, Mich., and the pension fund for a carpenters’ union in Arizona.