Securities Lawsuit Filed Against Wells Fargo

Columbus, NBA securities lawsuit has been filed against Wells Fargo, alleging the company misled managers of Nebraska Public Power District's (NPPD) retirement plan about the risks associated with an investment. The securities fraud lawsuit alleges Wells Fargo engaged in fraud, misleading statements and other deceptive practices when marketing its investment to NPPD.

The lawsuit alleges Wells Fargo marketed a securities lending program as having low risk, Businessweek (11/12/12) reports. Furthermore, the plaintiffs claim they were told no Wells Fargo clients lost money in the program. Nebraska Public Power District, however, claims it lost money and further claims Wells Fargo knew money from the lending program was being invested in risky vehicles. Finally, NPPD alleges it was not given timely updates on the investments, so it could take action to mitigate losses.

Wells Fargo has denied the allegations. The lawsuit reportedly seeks $1.5 million in damages. Approximately 2,400 people are participants in the NPPD retirement plan, according to the Journal Star (11/11/12). The lawsuit alleges NPPD attempted to withdraw from the lending program in 2008 after the plan lost money, but was dissuaded from doing so by Wells Fargo.

The lawsuit alleges Wells Fargo breached is fiduciary duty by misrepresenting the risks associated with the plan and by not investing in conservative, low-risk investments.

Meanwhile, The Wall Street Journal (11/6/12) reports J.P Morgan Chase & Co is close to setting an investigation by the Securities and Exchange Commission into how the company sold home loans to investors. The New York attorney general also filed a lawsuit against J.P. Morgan Chase, alleging the company's Bear Sterns unit, purchased by Chase in 2008, committed fraud when selling mortgage-backed securities.

Securities-related investigations against other banks are currently ongoing.

And Toyota Motor Corp has reportedly agreed to pay $25.5 million to settle a class action lawsuit filed by shareholders who alleged the carmaker did not disclose safety issues associated with unintended vehicle acceleration. In agreeing to the settlement, Toyota did not admit to any wrongdoing. According to Reuters (11/13/12), up to 10 million vehicles were recalled after reports surfaced that certain Toyotas were linked to unintended acceleration.

The Toyota lawsuit is Toyota Motor Corporation Securities Litigation, U.S. District Court, Central District of California, No. 10-cv-00922.