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.
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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.