(Reuters) — Wells Fargo & Co . agreed to pay $300 million to settle a shareholder lawsuit that alleged the bank concealed that it had pushed unnecessary insurance policies on auto loan customers, according to documents filed Tuesday in U.S. court.
The Construction Laborers Pension Trust of Southern California, which led the class action brought on behalf of investors, said in federal court in San Francisco that Wells Fargo and its former CEO, Timothy Sloan, had agreed to settle.
The bank did not admit wrongdoing.
The deal requires approval from U.S. Magistrate Judge James Donato, who is overseeing the case. The trial in the case had been scheduled for February 27.
“While we disagree with the allegations in this case, we are pleased to have resolved this legacy matter,”; a Wells Fargo spokesperson said in a statement.
A lawyer representing Mr. Sloan did not immediately respond to a request for comment.
The suit stems from one of the San Francisco-based bank’s earlier scandals over sales practices that resulted in government investigations and fines.
Wells Fargo revealed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “safety insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.
Shareholders sued in 2018, alleging that Wells Fargo misled them when Mr. Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank’s sales practices and culture.
The bank also hid auto insurance issues from the US Senate Banking Committee in November 2016, the investors alleged.
The lawsuit sought damages for investors who bought Wells Fargo stock between Nov. 3, 2016, and Aug. 3, 2017, the day before the bank disclosed additional details.
Wells Fargo settled a 2019 auto loan class action for $386 million without admitting wrongdoing.
In 2018, Wells Fargo agreed to pay $1 billion to US regulators to settle its auto insurance and mortgage practices.