A federal district judge in Southern California Monday gave preliminary approval to Great Western Financial Corp.'s offer to settle a class action lawsuit over its securities sales practices for $17.2 million.
A final hearing is scheduled for April 14. The plaintiffs in the suit claimed they were not told their purchases were uninsured bank products. The class, formed in November 1995, included customers who bought noninsured mutual fund and other noninsured securities.
Great Western set aside reserves of $6 million to $8 million in the fourth quarter to cover litigation costs, a company spokesman said. Insurance will pay the balance of the settlement, he said.
Marc Coleman, one of the plaintiffs' lawyers, said he is pleased with the settlement amount. He estimated the class lost a total of $25 million. "Given the amount of time this could have dragged on and the age of some clients, we are pleased with the settlement," Mr. Coleman said. Great Western also faces two suits in Florida. The thrift is one of several financial institutions whose investment sales practices have come under fire in recent years.