The U.S. District Court for the District of Minnesota granted final approval of a $62.5 million settlement in the class action against Wells Fargo. The settlement proceeds will be shared by a class of approximately 100 pension funds, corporations, insurance companies and others who participated in Wells Fargo Bank’s securities lending program from January 2006 to the present, according to The Miller Law Firm, which represented plaintiffs and served as co-lead counsel.
Several pension funds filed lawsuits against Wells Fargo related to the securities lending program of Wachovia Corp. before it was acquired by Wells Fargo in December 2008. The lawsuits, in part, contend the banks promoted the lending program as a near risk-free way for the pension funds to maximize portfolio returns; however, Wells Fargo actually invested some of the cash collateral in risky investments that lost value during the financial meltdown of 2008 (see “Wells Fargo Facing Another Securities Lending Suit”).
The City of Farmington Hills Employees Retirement System, the Board of Trustees of the Arizona State Carpenters Pension Trust Fund and the Arizona State Carpenters Defined Contribution Trust Fund served as court-appointed class representatives.
The case is The City of Farmington Hills Employees Retirement System v. Wells Fargo Bank, N.A., Civil No. 10-4372 DWF/JJG.