Wells Fargo was cleared by a jury of claims it misrepresented a securities-lending program to Blue Cross Blue Shield of Minnesota and other institutional investors and a demand it pay for $8.2m of losses.
Bloomberg reports that a federal court jury in St. Paul, Minnesota, Thursday returned a verdict rejecting allegations in the plaintiffs’ 2011 lawsuit that the bank marketed a risky program as safe, leading to losses the bank blamed on the financial crisis alone.
'The verdict validates that Wells Fargo was focused at all times on serving our clients’ interests', the bank said in a post-verdict statement. Wells Fargo sought 'to achieve the best results for all participants in the securities lending program during extremely difficult economic
The case is one of at least five filed in Minnesota against Wells Fargo over the securities-lending program, which was based in the state. Under the program, Wells Fargo held its clients’ securities in custodial accounts and made temporary loans of the instruments to brokers. The brokers used the securities to support trading activities such as short sales and option contracts.
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