Retirement plan suing Wells Fargo over securities lending
12 November 2012 Nebraska
Image: Shutterstock
It has been reported that the Nebraska Public Power District Employees Retirement Plan (NPPD) is suing Wells Fargo over claims that the bank misinformed it about the risks of a securities lending programme.
The $1.5 million lawsuit was filed in October in Platte County District Court on behalf of the trust fund committee of the retirement plan. It is seeking damages from the San Francisco-based bank.
Wells Fargo faced a group lawsuit from institutional investors over similar claims. Filed in 2010 by the City of Farmington Hills Employees Retirement System, a Michigan pension fund, on behalf of more than 100 institutional investors, the lawsuit claimed breach of fiduciary duty and fraud. The investors sought permission to pursue the case against Wells Fargo as a group.
Wells Fargo “touted” its securities-lending programme “as a highly-secure way for its institutional clients to maximise portfolio returns,” according to the complaint. Instead, the pension fund said, “Wells Fargo invested a substantial portion of the collateral in extremely risky securities.”
The investors also claimed that Wells Fargo concealed investment performance from class members to prevent them from exiting the programme.
The bank also lost a jury verdict in 2010 of about $30 million to four Minnesota non-profits making similar claims about its lending programme.
The $1.5 million lawsuit was filed in October in Platte County District Court on behalf of the trust fund committee of the retirement plan. It is seeking damages from the San Francisco-based bank.
Wells Fargo faced a group lawsuit from institutional investors over similar claims. Filed in 2010 by the City of Farmington Hills Employees Retirement System, a Michigan pension fund, on behalf of more than 100 institutional investors, the lawsuit claimed breach of fiduciary duty and fraud. The investors sought permission to pursue the case against Wells Fargo as a group.
Wells Fargo “touted” its securities-lending programme “as a highly-secure way for its institutional clients to maximise portfolio returns,” according to the complaint. Instead, the pension fund said, “Wells Fargo invested a substantial portion of the collateral in extremely risky securities.”
The investors also claimed that Wells Fargo concealed investment performance from class members to prevent them from exiting the programme.
The bank also lost a jury verdict in 2010 of about $30 million to four Minnesota non-profits making similar claims about its lending programme.
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