Wells Fargo & Co. agreed to pay $1 billion to settle a shareholder lawsuit that accused it of making misleading statements about its compliance with federal consent orders following the 2016 scandal involving the opening of unauthorized customer accounts.
The settlement is one of the top six largest securities class-action settlements of the past decade, according to lawyers for the investors, who on Tuesday won preliminary approval of the accord from a Manhattan judge.
The investors sued the bank in 2020 claiming that its former chief executive officer, Tim Sloan, and other executives made misleading statements in testimony before Congress and to investors and the media.
The investors alleged that the executives presented too rosy a scenario about their interactions with regulators, including not disclosing that their initial reform plans had been rejected by authorities.
The proceeds of the settlement will go to investors who bought Wells Fargo stock from February 2, 2018, through March 12, 2020.
