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Wells Fargo to pay $1B on shareholders lawsuit settlement

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Financial services firm Wells Fargo has reached a settlement in a class-action lawsuit, agreeing to pay shareholders $1 billion. The lawsuit alleged that the bank had misled its shareholders about its efforts to resolve the 2016 fake accounts scandal.

A $1 billion all-cash settlement was granted preliminary approval by U.S. District Judge Gregory Woods in a Manhattan federal court. Another hearing will be held on September 8 for final approval.

In a statement, the bank said that it disagreed with the allegations made in the lawsuit. On the other hand, while they do not agree with the accusations, they are “pleased to have resolved this matter.”

Back in December, Wells Fargo also made a $3.7 billion agreement with the Consumer Financial Protection Bureau to resolve allegations that the bank’s actions had harmed more than 16 million individuals with deposit accounts, auto loans, and mortgages.

Back then, Ripple CEO Brad Garlinghouse compared the Wells Fargo issue with the FTX collapse. According to Garlinghouse, the world was outraged by FTX, which he believed to be “appropriate.” However, the CEO expressed his concern about the lack of attention to the Wells Fargo case considering that they’ve also “mismanaged billions in customer funds.”

Related: Defending against SEC to cost Ripple $200M, CEO Brad Garlinghouse says

Members of the community recently voiced similar concerns on a recent Reddit forum. On May 17, one Redditor said that the United States Securities and Exchange Commission should also look into banks. They wrote:

“People put their hard-earned money in a bank thinking it is 100% safe, take loans for house and cars only to be scammed out of it.”

The community member also argued that banks have violated regulations multiple times every single year, but “the SEC has stayed rather quiet” about it. Another Redditor echoed the sentiment and said that it’s “obvious the banks get a pass for the most part.”

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?