Wells Fargo comments on lawsuit win
12 August 2013 Minnesota
Image: Shutterstock
A Minnesota jury has cleared Wells Fargo in the lawsuit levelled at the bank by Blue Cross and Blue Shields.
In September 2011, Blue Cross and Blue Shield of Minnesota, which offer health plans for individuals and businesses, and other institutional investors, launched a suit against Wells Fargo in Minnesota federal court, accusing the financial services company of grossly mismanaging investments in its securities lending programme.
Blue Cross Blue Shield’s claim stated that: securities lending was offered as a conservative option for investors; and the bank also represented that the collateral would be safely invested in high-grade money market instruments. Neither of these conditions were satisfied, alleged the firms.
But the jury has cleared Wells Fargo of any liability. A statement from the company said: “The verdict validates that Wells Fargo was focused at all times on serving our clients’ interests and that Wells Fargo worked very hard and responsibly to achieve the best results for all participants in the securities lending programme during extremely difficult economic conditions.”
“Our conservative approach was effective, as the plaintiffs in Wells Fargo securities lending program had minimal losses averaging approximately three percent at the same time that the markets were down up to 50 percent during the height of the financial crisis.”
“The jury’s verdict supports our company’s firm belief that the investments made on behalf of our clients were in accordance with investment guidelines and were prudent and suitable.”
In September 2011, Blue Cross and Blue Shield of Minnesota, which offer health plans for individuals and businesses, and other institutional investors, launched a suit against Wells Fargo in Minnesota federal court, accusing the financial services company of grossly mismanaging investments in its securities lending programme.
Blue Cross Blue Shield’s claim stated that: securities lending was offered as a conservative option for investors; and the bank also represented that the collateral would be safely invested in high-grade money market instruments. Neither of these conditions were satisfied, alleged the firms.
But the jury has cleared Wells Fargo of any liability. A statement from the company said: “The verdict validates that Wells Fargo was focused at all times on serving our clients’ interests and that Wells Fargo worked very hard and responsibly to achieve the best results for all participants in the securities lending programme during extremely difficult economic conditions.”
“Our conservative approach was effective, as the plaintiffs in Wells Fargo securities lending program had minimal losses averaging approximately three percent at the same time that the markets were down up to 50 percent during the height of the financial crisis.”
“The jury’s verdict supports our company’s firm belief that the investments made on behalf of our clients were in accordance with investment guidelines and were prudent and suitable.”
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