New York Paralegal Blog

OAKLAND, Calif. (CN) - A California law firm accepted a $6 million "secret settlement" of a labor class action against a bank, agreed to dismiss the claims without telling 600 clients, then tried to convert the whole settlement into legal fees, a class action claims in state court.

Preet Bharara, the United States Attorney for the Southern District of New York, Helen Kanovsky, General Counsel of the U.S. Department of Housing and Urban Development (“HUD”), and David A. Montoya, Inspector General of HUD, announced today that the United States has filed a civil mortgage fraud lawsuit against WELLS FARGO BANK, N.A. (“WELLS FARGO”). The Government’s Complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) for more than 10 years of misconduct in connection with WELLS FARGO’s participation in the Federal Housing Administration (“FHA”) Direct Endorsement Lender Program. The lawsuit alleges that, as a result of WELLS FARGO’s false certifications, FHA has paid hundreds of millions of dollars in insurance claims on thousands of mortgages that defaulted.

Washington, D.C., Aug. 14, 2012 – The Securities and Exchange Commission today charged Wells Fargo’s brokerage firm and a former vice president for selling investments tied to mortgage-backed securities without fully understanding their complexity or disclosing the risks to investors.

By TRAVIS SANFORD WASHINGTON (CN) - Wells Fargo Bank has agreed to pay $175 million to settle allegations of discriminatory lending practices against African-American and Hispanic borrowers.

SAN FRANCISCO - Attorney General Edmund G. Brown announced today that 3,500 investors, whose holdings in auction rate securities were frozen in the financial crisis of 2008, have recovered $1.4 billion through a settlement the Attorney General hammered out with Wells Fargo affiliates. "We went to bat for people who believed their investments were like cash," Brown said, "but discovered after the financial meltdown that they couldn't get their hands on even a dime of their money for two long years. Now, because of the settlement, they have all of their money back."

Connecticut - Attorney General Richard Blumenthal announced today a first-in-the-nation court victory declaring that Wells Fargo’s insurance arm broke the law when it failed to tell consumers about hidden kickbacks the company was paid in exchange for favoring a group of “preferred” insurers. The court ruled that insurance broker Acordia, Inc., now owned by Wells Fargo, had a fiduciary duty to be open and honest with its clients -- and that it violated that trust. Blumenthal said this decision will have a significant impact on law enforcement cases involving such practices -- and is a profound victory for insurance consumers, particularly businesses throughout Connecticut. Several business representatives testified at trial that they would have wanted to know about the hidden commissions because the costs were eventually paid by their businesses.