Wells Fargo on Friday announced a tentative $480 million settlement to a class-action lawsuit that was brought by shareholders in connection with the bank’s phony-accounts scandal.
The lawsuit alleged that bank executives deliberately failed to disclose material facts to shareholders. It argued that the company’s cross-selling strategy was designed to fulfill sales quotas and otherwise benefit Wells Fargo while burdening consumers with products that they did not authorize, but the bank withheld that information from investors.
The case was brought on behalf of anyone who bought shares in the San Francisco bank between Feb. 26, 2014, and Sept. 15, 2016, which was around the time that the scandal spilled into public view. Wells Fargo has disclosed that as many as 3.5 million accounts were opened without the customers’ permission.
In a press release Friday, Wells said that it reached the settlement agreement in order to avoid the cost and disruption of further litigation. The bank also stated that it denies the allegations in the lawsuit.
“We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders,” Wells Fargo CEO Tim Sloan said in the release.
Wells said that it had fully accrued the amount of the proposed settlement as of March 31. The settlement agreement is subject to approval by a judge in U.S. District Court in the Northern District of California.
The embattled bank also said Friday that a final approval hearing has been scheduled for May 30 in connection with a proposed settlement of claims brought by consumers. Wells has agreed to pay $142 million to settle various consumer class actions that were filed in the wake of revelations about the fake accounts.
Wells Fargo still faces various government investigations in connection with the scandal, as well as additional lawsuits brought by shareholders and employees.