U.S. Bancorp has agreed to pay $44.5 million to settle a class-action lawsuit by Peregrine Financial Group customers who lost money in long-running fraud.
The $410 billion-asset company's settlement agreement would resolve claims that U.S. Bancorp allowed Peregrine founder Russell Wasendorf to divert funds to himself using a U.S. Bank account, Reuters reported on Tuesday.
A spokesman for U.S. Bank said the settlement would have no impact on the Minneapolis company's second-quarter earnings.
"We are pleased to have reached a resolution regarding Peregrine Financial Group," U.S. Bancorp spokesman Dana Ripley said in a statement emailed to Reuters.
The proposed settlement requires court approval.
The settlement also would result in about 14,000 former Peregrine customers being repaid more than 20% of the money Wasendorf diverted, before attorneys' fees and expenses, the court filing said. They could seek up to 31% of the settlement fund in attorneys' fees.
Wasendorf pleaded guilty to embezzling more than $215 million and is serving a 50-year sentence. Peregrine was a brokerage and futures commission merchant that collapsed in July 2012, after a probe into Wasendorf's use of customer money. Wasendorf later confessed to the embezzlement.