Wells Fargo to Pay $590 Million to Settle Claims it Misled Investors
Wells Fargo has announced that it has agreed to pay $590 million to investors who claimed that the firm misled them regarding investments made from 2006 into 2008, according to Bloomberg. Among the plaintiffs, were the Louisiana Sheriffs’ Pension and Relief Fund, the Orange County Employees Retirement System in California and the Southeastern Pennsylvania Transportation Authority.
The $590 million pact is subject to court approval and will resolve issues that Wachovia misled investors. Wachovia was acquired by Wells Fargo in 2008, during the financial meltdown. According to court documents, the accusations were linked to quality of assets contained in the mortgages of Golden West Financial. Golden West was a California home mortgage lender that was taken over by Wachovia.
Also named in the lawsuit was KPMG LLP, the accounting firm that did the audit work for Wachovia. They reportedly agreed to pay $37 million, “to avoid the cost of litigation and to put this matter behind us,” according to a KPMG spokesperson.