Wells Fargo to pay $480 million to settle lawsuit over fake accounts

Wells Fargo said Friday it will pay $480 million to settle a lawsuit filed by investors related to the bank’s 2016 sales scandal involving the opening of unauthorized accounts.

The securities fraud suit, filed in the District Court for the Northern District of California, alleged that Wells Fargo misled investors about its sales practices. The class-action suit covered those who purchased Wells Fargo stock from February 2014 to September 2016.

Wells Fargo denied the claims in the suit and said it agreed to the settlement “to avoid the cost and disruption of further litigation.”

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“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 a statement.

“We are making strong progress in our work to rebuild trust, and this represents another step forward.”

Wells Fargo has been penalized by federal agencies for opening and charging fees on millions of banking and credit card accounts without customer authorization.

The Consumer Financial Protection Bureau (CFPB) fined the bank $100 million in September 2016 over the scandal, and the Federal Reserve in January froze the bank’s growth. The Fed is also seeking the ouster of four Wells Fargo board members.

The Friday settlement comes two weeks after the CFPB and Office of the Comptroller of the Currency fined Wells Fargo a combined $1 billion to settle charges the bank charged mortgage borrowers inappropriate fees and forced loan customers to purchase unnecessary auto insurance.