Robbins Geller Secures $300 Million Recovery for Wells Fargo Investors — 4th-Largest Settlement in Northern District of California
Case Involved Alleged Improper Auto Insurance Charges
On September 26, 2023, the Honorable James Donato of the U.S. District Court for the Northern District of California approved a $300 million settlement in a securities class action litigated for five years.
The case involved allegations Wells Fargo leadership knew the bank had improperly charged customers for unneeded auto insurance, and that it had subsequently put many of those customers into delinquency, and repossessed their vehicles, due to the additional expense. Executives allegedly ended the practice but their failure to tell investors about the misconduct led to shareholder losses.
“We appreciate the court’s approval of this recovery, and the efforts of the lead plaintiff Construction Laborers Pension Trust for Southern California in prosecuting the case on behalf of all investors,” said partner Scott H. Saham.
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.
Preliminary settlement was reached as the parties were preparing for a trial, which was scheduled to commence in February 2023.
This case is the Firm’s third major securities fraud recovery to be announced or finalized within the past year 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 final approval of the settlement on July 14, 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 10 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 more than $1.75 billion for investors in 2022 — the third year in a row Robbins Geller tops the list. And in those three years alone, Robbins Geller recovered nearly $5.3 billion for investors, more than double the amount recovered by any other plaintiffs’ firm. The Firm 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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