$627 Million “Record Settlement” — Largest Securities Act Recovery To Date
The global settlement, including $590 million agreed to be paid by Wells Fargo, and $37 million from Wachovia auditor KPMG, is the largest recovery under the Securities Act of 1933, the 14th largest class action securities settlement ever, and the largest such credit-crisis settlement to date. The lawsuit focused on Wachovia's exposure to "pick-a-pay" loans, which the bank's offering materials said were of "pristine credit quality," but which were actually allegedly made to subprime borrowers, and which ultimately massively impaired the bank's mortgage portfolio. The lawsuit alleged Wachovia's offering materials materially misstated and failed to disclose the true nature and quality of Wachovia's mortgage loan portfolio, which exposed the bank and misled investors to tens of billions of dollars of losses on mortgage-related assets. Robbins Geller is one of lead counsel, representing the City of Livonia Employees’ Retirement System, Hawaii Sheet Metal Workers Pension Fund, and the investor class.
- "Record Settlement" – The American Lawyer
- "[O]ne of the 15 biggest securities class-action settlements in history and the biggest to emerge so far from the financial crisis." – The Charlotte Observer
- "Most Impressive" – The D & O Diary
- "Largest Credit Crisis Settlement To Date" – ISSGovernance.com