$480M Wells Fargo settlement finalized

A federal judge in San Francisco has given final approval to a $480 million deal that settles a shareholder class-action suit against Wells Fargo over the bank’s unauthorized accounts scandal.

The deal, reached in May and given preliminary approval in September, would compensate Wells Fargo shareholders for losses they incurred after the bank’s 2016 admission that employees might have created millions of unauthorized accounts.

The settlement will pay shareholders who bought Wells Fargo stock between Feb. 26, 2014, and Sept. 20, 2016. During that period, Wells Fargo shares traded for as much as $53, but later sank as low as $41.

The San Francisco finance giant will pay $480 million, nearly $96 million of which in fees and expenses will go to the attorneys who worked on the case. If all eligible shareholders participate in the settlement, the payout would amount to 35 cents per share.

Shareholders, including lead plaintiff Union Asset Management, sued for securities fraud in 2016, alleging that Wells Fargo executives had improperly inflated the company’s stock price by touting the bank’s prowess at so-called cross-selling — getting customers to sign up for numerous accounts and services.

The bank’s focus on cross-selling was later blamed for the aggressive sales quotas that pushed thousands of workers to open accounts without customers’ authorization.