Boston, MA 05/30/2014 (wallstreetpr) – Diversified financial services provider, Wells Fargo & Co (NYSE:WFC) had to face embarrassing situations in legal disputes in at least two cases recently. While one is related with regard to class action suit ending in the company paying claims, another case related to the alleged predatory lending practices.
Settles Class Action Suit
Wells Fargo & Co (NYSE:WFC) is ready to pay $62.5 million towards claims from institutional investor group that charged the bank for improperly advertising a risky security lending program as a secure one. The U.S District Judge Donovan Frank in St. Paul, Minnesota, has received a settlement agreement reached by about 100 investors with the company. The investor group is headed by the City of Farmington Hills Employees Retirement System pension plan.
The investor group has sought the preliminary approval of the settlement agreement from the judge that would solve a class action suit of 2010. Though the company has struck a deal, it has refused to accept any wrongdoing. Their opinions seem to have gained ground since a federal judge ruled in favor of the company last year following a similar claims trial of alleged misleading of a group of investors. However, plaintiffs’ lawyers cited that the latest case is the result of their desire to settle the case rather than continuing the litigation. A hearing is scheduled for June 5.
Predatory Lending Practices
In another case, the financial services provider has failed in its efforts to convince the District Judge Otis Wright II to dismiss a suit filed by Los Angeles city accusing the bank of predatory lending practices, which focused on minority borrowers leading to the property tax revenue loss.
While preparing to defend itself as a responsible lender, the company has reportedly expressed its disappointment over the court’s decision to proceed with a lawsuit. The charge against the bank is that it has been making loans to minority borrowers since at least 2004 knowing fully well their affordability thus resulting in an inconsistent growth in foreclosures number.
