Wells Fargo has settled a class-action lawsuit which alleges that the bank misled its shareholders regarding its efforts to address the 2016 phony accounts scandal by agreeing to pay $1 billion to its shareholders.
United States district judge Gregory Woods granted preliminary approval to a $1 billion cash-only settlement in Manhattan federal court. On September 8, there will be another hearing for final approval.
In a statement, the bank expressed disagreement with the lawsuit’s allegations. Despite disagreeing with the accusations, the organization is “pleased to have resolved this matter.”
Wells Fargo also reached a $3.7 billion settlement with the Consumer Financial Protection Bureau in December 2022 to resolve allegations that the bank’s actions harmed over 16 million people with deposit accounts, auto loans, and mortgages.
At the time, Brad Garlinghouse, CEO of Ripple, likened the Wells Fargo issue to the FTX collapse. According to Garlinghouse, the world was incensed by FTX, which he deemed “appropriate.”
However, the CEO expressed concern over the absence of attention given to the Wells Fargo case, as it “mismanaged billions in customer funds.”
On a recent Reddit forum, members of the community expressed similar concerns. One Reddit user suggested on May 17 that the U.S. Securities and Exchange Commission should also investigate banks. They wrote:
“People put their hard-earned money in a bank thinking it is 100% safe, take loans for house and cars only to be scammed out of it.”
Additionally, the community member argued that banks violated regulations multiple times per year, but “the SEC has remained relatively silent” about it.
The sentiment was echoed by a second Reddit user, who stated that it is “obvious the banks get a pass for the most part.”
