Wells Fargo to pay $480 mn to settle lawsuit

New York (AFP) – Scandal-plagued Wells Fargo said Friday it would pay $480 million to settle a lawsuit over alleged securities fraud.

While the bank said it denies the claims in the suit over “misstatements and omissions” in disclosures about its sales practices, it agreed to pay the sum “to avoid the cost and disruption of further litigation.”

The deal is subject to approval by the US District Court in northern California.

“We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders,” CEO Tim Sloan said. 

“We are making strong progress in our work to rebuild trust and this represents another step forward.”

It was the latest development in the saga of Wells Fargo, which came under fire from investors and lawmakers over the 2016 fake accounts scandal and was fined $1 billion by US regulators in April for deficiencies that harmed consumers in its mortgage and auto loan businesses.

The Federal Reserve, in an unprecedented move, in February ordered the bank to halt its expansion until it improved governance, following “persistent misconduct.”