Wells Fargo will be paying a hefty price for allegedly mishandling a trust fund. A Florida jury found the bank guilty of mismanagement and unauthorized fees, ordering it to pay a staggering $832 million in damages.
Millions in Damages and Fees
The lawsuit, filed on behalf of the Seminole Minors Per Capita Payment Trust, involved approximately 2,000 children. The jury awarded $825 million in damages and over $7 million to cover the unauthorized fees. Eight Wells Fargo executives also received smaller individual fines ranging from $50 to $500.
Wells Fargo’s Wrongdoing Exposed
According to the plaintiffs’ lawyer, a Wells Fargo relationship manager admitted to the bank’s wrongdoing during the trial. The manager confessed to knowingly mismanaging funds, keeping poor records, and charging millions in unauthorized fees. The manager also admitted to never fully reviewing the trust’s governing documents, despite managing one of the bank’s largest accounts.
Poor Investment Strategy and Illegal Fees
Wells Fargo was removed as the trust’s trustee in 2016 after the Seminole Tribe reviewed the fund’s performance. The bank’s investment strategy reportedly yielded returns that barely kept up with inflation. The tribe also questioned the legitimacy of $7.6 million in fees charged by Wells Fargo.
Wells Fargo to Appeal
Wells Fargo plans to appeal the verdict. A spokesperson stated that the bank followed the tribe’s instructions, fulfilled its fiduciary duty, and delivered results consistent with the trust’s mandate. They claim courtroom rulings prevented them from presenting their full case to the jury.
Background on the Trust
The Seminole Minors Per Capita Payment Trust was established two decades ago, initially managed by Wachovia Bank (later acquired by Wells Fargo). The trust, holding nearly $3 billion in assets, is funded primarily by the Seminole Tribe’s gaming operations.
