Robbins Geller Secures $300 Million in Wells Fargo Securities Fraud Class Action
Case Resolves Allegations Arising Out of Placing Forced, Unneeded Auto Insurance on Auto Loan Borrowers
On February 7, 2023, Robbins Geller Rudman & Dowd LLP announced a $300 million settlement in a long-running securities class action lawsuit against Wells Fargo & Company, pending court approval.
“When companies conceal widespread abusive or unfair business practices that harm their customers, investors often get injured, as well,” said Scott H. Saham, a partner at Robbins Geller and one of the lead counsel for the class.
“The recovery here is part of remediating the entire spectrum of harm that you get in a complex fraud case, and we’re grateful to our client, the Construction Laborers Pension Trust for Southern California, for their determination to see this case through years of hard-fought litigation,” Saham added.
Construction Laborers Pension Trust for Southern California is serving as lead plaintiff in this case.
Summary of Key Allegations
In July 2017, an article by The New York Times revealed that Wells Fargo executives were aware that the company had improperly charged more than 800,000 customers for unneeded collision protection insurance. The New York Times obtained an internal report prepared for executives showing that approximately 274,000 customers were put into delinquency and almost 25,000 vehicles were wrongfully repossessed due to the additional expense. Although Wells Fargo ended the practices at issue, the company allegedly did not disclose this conduct to investors. A week after the publication of the New York Times article, Wells Fargo disclosed in an SEC filing that it had been aware of the problem since 2016.
Robbins Geller brought a securities fraud case on behalf of the Construction Laborers Pension Trust for Southern California and a nationwide class of investors alleging that Wells Fargo executives improperly concealed the company’s force-placed insurance practices from investors while the company’s stock traded at artificially inflated prices.
The Construction Laborers Pension Trust for Southern California was appointed lead plaintiff in June 2018. In January 2020, U.S. District Judge James Donato of the U.S. District Court for the Northern District of California denied in part Wells Fargo’s motion to dismiss the case. On August 15, 2022, the court certified a class of investors in the case.
The settlement was reached as the parties were preparing for a trial, which was scheduled to commence later this month. The settlement is subject to court review and approval.
This case is the Firm’s third major securities fraud recovery to be announced or finalized within recent months in the U.S. District Court for the Northern District of California.
- In November 2022, the Firm announced a $141 million recovery for investors in a securities fraud class action suit against McKesson Corporation, in the Northern District of California. The court granted preliminary approval to the proposed settlement in January 2023.
- Also in November, the Firm secured final approval of an $809.5 million recovery for investors against Twitter, Inc., also in the Northern District of California.
Lead plaintiff Construction Laborers Pension Trust for Southern California, represented by Robbins Geller attorneys Spencer A. Burkholz, Scott H. Saham, Jason A. Forge, Jason C. Davis, Lucas F. Olts, Ashley M. Kelly, Erika Oliver, and Kevin S. Sciarani, obtained this result for the class of investors.
About Robbins Geller
Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex litigation firms, representing plaintiffs in securities fraud, shareholder derivative, antitrust, corporate takeover, and consumer fraud and privacy cases. With 200 lawyers in 9 offices, Robbins Geller is one of the world’s largest plaintiffs’ firms, and the Firm’s attorneys have obtained many of the largest securities, antitrust, and consumer class action recoveries in history.
The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors in 2021 – more than triple the amount recovered by any other plaintiffs’ firm. The Firm’s attorneys secured the largest-ever securities fraud class action settlement — $7.2 billion — in In re Enron Corp. Securities Litigation.
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Purple Mountain Trust v. Wells Fargo & Company, No. 3:18-cv-03948 (N.D. Cal.).
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