PROVIDENCE, R.I. (WPRI) — Rhode Island expects to receive an undisclosed amount of money after Wells Fargo agreed Tuesday to a $1 billion settlement over a class-action lawsuit accusing the bank of defrauding shareholders.
The nation’s fourth largest bank has been under strict regulatory oversight since 2018 when it became ensnared in a series of scandals tied to the mistreatment of customers, including opening millions of accounts without people’s permission.
The class-action lawsuit — which the state’s pension system had joined as a plaintiff — accused the bank of subsequently defrauding its shareholders when detailing the progress it was making to rectify those issues.
“Wells Fargo betrayed the trust of Rhode Island pensioners and is now rightly facing consequences because of that,” said General Treasurer James Diossa, who oversees the pension system, known formally as the Employees’ Retirement System of Rhode Island, or ERSRI.
“I am proud that ERSRI stood up for its stakeholders and held Wells Fargo accountable for its misconduct, and that we achieved this historic settlement,” he added in a statement.
The settlement — which received preliminary approval from a Manhattan federal judge — will be paid to plaintiffs based on losses, which Diossa spokesperson Michelle Moreno-Silva said totaled about $6.1 million in Rhode Island. But state officials said they don’t know at this point what the total amount will be.
In a statement, a Wells Fargo spokesperson told CBS News the settlement resolves an issue with the company and former employees, “who have not been at the company for several years.”
“While we disagree with the allegations in this case, we are pleased to have resolved this matter,” the spokesperson added.
Correction: An earlier version of this story stated the state expected to receive $6.1 million. State official said they do not know at this point how much the state will receive.
Eli Sherman (firstname.lastname@example.org) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.
Tim White contributed to this report.