JPMorgan and others will pay a whopping $490,000,000 in new fines according to the latest court documents and updates.
JPMorgan, Goldman Sachs, UBS and Morgan Stanley have agreed to collectively pay $499 million to end the suit, which was filed in 2017 by US pension funds, led by the Iowa Public Employees’ Retirement System.
“The pension funds accuse the banks of trying to corner the market with their own system called EquiLend, while hindering the development of new platforms that would execute the borrowing and lending of electronic securities,” reports DH.
EquiLend was set up in 2001 by Barclays Global Investors, Bear Stearns, Goldman Sachs, JPMorganChase, Lehman Brothers, Merrill Lynch, Morgan Stanley, Northern Trust, State Street, and UBS Warburg, but is now owned by Bank of America.
Credit Suisse already paid an $81 million fine to settle its end of the lawsuit, and Bank of America is now the last remaining defendant who has not settled.
None of the banks have issued a statement on the case, and EquiLend has denied any wrongdoing, with representatives stating it reached a settlement in order to maintain day-to-day business operations for its clients, reports Financial Times.
“While Defendants have denied any wrongdoing and that any reforms were necessary, Plaintiffs believe that the equitable relief they designed and negotiated for will help align EquiLend to the best practices and guidelines for anti-cartel and collaborations among competitors.
Plaintiffs believe the reforms should materially decrease the likelihood of future collusion in the stock lending market, and thus Plaintiffs believe the reforms thereby increase the chances the industry would transition to a more competitive trading environment,” said court documents.
Also Read: JPMorgan Is Freezing Customer Bank Accounts in New Scandal
Wells Fargo to Now Pay $35 Million for Overcharging Customers
Wells Fargo (NYSE:WFC) will now pay $35 Million for overcharging millions of dollars to customers for excessive fees in investment advice.
The Securities and Exchange Commission (SEC) claims that Wells Fargo collected an additional $26.8 million in advisory fees after overcharging more than 10,900 customers.
The SEC says the overbilling took place when certain financial advisers from Wells Fargo along with the firms acquired by the lender agreed to reduce the standard advisory fees for some of the banking giant’s customers.
Although the agreement was put into writing at the time the customers’ accounts were opened, Wells Fargo failed to make the changes in its billing systems, reports DH.
“The SEC also claims that the banking giant did not establish measures or policies that could have prevented the overbilling.
According to the SEC, Wells Fargo overcharged some customers who opened their accounts before 2014 through December 2022.”
Gurbir S. Grewal, Director of the SEC’s Enforcement Division made the following statement:
“For years, Wells Fargo and its predecessor firms negotiated reduced advisory fees with thousands of clients, but failed to honor them, overcharging those clients millions of dollars as a result. Today’s enforcement action underscores the need for firms growing their businesses through acquisition to ensure that their growth does not come at the expense of client protection…
Investment advisers must adopt and implement policies and procedures to ensure that they honor their agreements with all of their clients, including legacy clients of predecessor firms.”
Wells Fargo has agreed to pay a $35 million civil penalty without admitting or denying the charges.
The bank also paid $40 million, including interest, to reimburse customers who paid the additional advisory fees.
Also Read: Wells Fargo Banks to Quickly Close Down This Year
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