Wells Fargo Wins Jury Verdict in Securities Lending Matter

August 20, 2014

After a seven-week trial, a federal jury in Minnesota found that Wells Fargo did not misrepresent its investment strategy and was not liable on any plaintiff claims in a securities lending matter brought by a class of institutional investors. Plaintiffs alleged that Wells Fargo had grossly mismanaged investments in its securities lending program by putting assets in high-risk ventures and failing to disclose the deteriorating condition of the investments. The jury rejected allegations that the bank had marketed the investment program as risk free, responding to Wells Fargo's argument that the program losses were attributable to the financial crises. In a related ERISA matter, a judge in the U.S. District Court for the District of Minnesota dismissed allegations of fiduciary breach and fraud leveled against Wells Fargo.

A team from Analysis Group -- including Managing Principals Jeffrey Cohen and Andrew Wong, Principal Elizabeth Eccher, Vice Presidents Rebeccah Filsoof and Maria Lauve, and Manager Edi Grgeta -- was retained by counsel on behalf of Wells Fargo to support academic and industry experts in these matters. Analysis Group affiliates John Peavy, Myron Glucksman, and John McConnell addressed issues related to the customs and practices of securities lending programs, Wells Fargo's management of cash collateral, the market for structured investments, and the quantification of damages.