Wells Fargo to Pay $23.75M Securities Fraud Lawsuit Settlement

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Wells Fargo to Pay $23.75M Securities Fraud Lawsuit Settlement

By Andrea Gressman

Sarasota, Florida has hit the news recently for a large settlement they are about to receive after filing a securities lawsuit against Wells Fargo. Wells Fargo recently agreed to pay $23.75 million to Sarasota County as a settlement for a securities lawsuit filed against them claiming that Wachovia Bank, predecessor to  Wells Fargo, did not manage Sarasota County’s securities lending portfolio properly from 2007-2008. The Wells Fargo securities lawsuit was filed by the county in 2010.

The Wells Fargo securities lawsuit went on to state that Wachovia invested the county’s funds in a negligent manner when it invested in Lehman Brothers bonds as well as a “complex collateralized debt obligation issued by Altius Funding,” according to a December 14, 2012 publication by the Miami Herald.

Wells Fargo Assumes Wachovia’s Liabilities, Which Led to Securities Fraud Lawsuit

Wachovia was on the verge of failing in the later part of 2008 when the financial crisis was at its peak when Wells Fargo came in and took over the bank and its liabilities. Karen Rushing, a Clerk of Court and Controller of Sarasota County, is the one who initiated the securities fraud lawsuit.

In 2006 she originally selected Wachovia to increase the performance of the working capital of the county. In regards to the Wells Fargo securities settlement she has been reported as saying, “I think this is a very good settlement. The settlement resolves the litigation and brings in almost $24 million for the citizens of Sarasota County.” She goes on to claim that Wachovia did not follow Sarasota County’s “extremely conservative investment guidelines when it invested in Lehman and Altius,” according to the article in the Miami Herald.

Wells Fargo Denies Allegations, but Agrees to Securities Lawsuit Settlement

The allegations made in the securities lawsuit were denied by Wells Fargo but after a securities lawsuit that lasted over a year and a trial scheduled for December of 2012, Wells Fargo decided to settle. Perhaps another factor to this decision was the fact that the City of St. Petersburg won a securities lawsuit filed against Wachovia in March of 2012. Although the securities lawsuit is currently being appealed, it may have been an indication to Wells Fargo on how a trial by jury may result and that was obviously a chance they were not willing to take.

Filing Your Own Securities Fraud Lawsuit

If you or someone you know has been the victim of stock fraud or securities fraud, please learn more about your legal options. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation to learn more about your rights from a securities lawsuit lawyer. You may be eligible to file a securities lawsuit or your own and recoup the investment you have lost.  Provide your information and receive a free legal review today. There are currently securities fraud specialist standing by ready to help you.

Updated January 3rd, 2013

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions