Wells Fargo Securities Fraud Lawsuit Alleging Breach of Fiduciary Duty and Consumer Fraud Results In $30 Million Award For Wells Fargo Clients.
Four plaintiffs in Minnesota were awarded more than $30 million in damages in a securities fraud lawsuit against Wells Fargo in Ramsey County circuit court in Minnesota alleging that Wells Fargo invested plaintiffs money in risky securities and failed to disclose the diminishing value of their investments, according to a securities lawsuit news report.
The plaintiffs reportedly alleged that Wells Fargo operated a securities lending program whereby it held clients’ securities in custodial accounts and then used those funds to make temporary loans to brokers who then borrowed the securities (by posting collateral worth at least 102 percent of the value of the loaned securities) to make risky trades, such as short sales and option trades involving structured investment vehicles, SIVs, mortgage backed and asset backed securities. The Wells Fargo securities fraud complaint reportedly alleged that Wells Fargo promised to focus on safe, liquid investments, such as money markets.
A jury reportedly found that Wells Fargo breached its fiduciary duty to the plaintiffs and violated the Minnesota Consumer Fraud Act and awarded compensatory damages of $30.1 million, $14.1 million for breach of fiduciary duty claims and $4 million to each plaintiff on the consumer fraud claim.
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