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Wells Fargo Reaches Agreement with U.S. Department of Labor Related to Legacy 401(k) Plan Matter
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
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Rhea-AI Summary
Wells Fargo has reached an agreement with the U.S. Department of Labor to resolve a legacy matter related to its 401(k) Plan. The bank, which disagrees with the DOL's allegations, will pay approximately $13.2 million to the DOL and $131.8 million to eligible current and former 401(k) participants. The company emphasizes that all participants received their due contributions, and the transactions were independently approved. Wells Fargo has not conducted the disputed transactions since 2018.
Positive
The company will pay $131.8 million to eligible current and former 401(k) Plan participants, compensating them fully.
An independent third-party confirmed that the 401(k) Plan did not pay more than fair market value for the stock involved.
Negative
The agreement resolves allegations from the DOL that the company disagrees with, indicating potential reputational risk.
The legacy matter may imply previous non-compliance with regulatory standards.
SAN FRANCISCO--(BUSINESS WIRE)--
Wells Fargo announced today that it has reached an agreement with the U.S. Department of Labor (DOL) to resolve a previously disclosed, legacy matter regarding the DOL’s review of transactions that were used to fund certain Company contributions to its 401(k) Plan. The Company strongly disagrees with the DOL’s allegations and believes it followed applicable laws in conducting the transactions. Though the Company disagrees with the DOL’s allegations and has not conducted these transactions since 2018, Wells Fargo believes resolving this legacy matter is in the best interest of the Company.
All 401(k) Plan participants received all matching and profit-sharing contributions due to them. An independent third-party approved the transactions on behalf of the 401(k) Plan and confirmed that the 401(k) Plan did not pay more than fair market value for the Company stock at issue.
The agreement provides that the Company will pay approximately $13.2 million to the DOL and approximately $131.8 million to eligible current and former 401(k) Plan participants. As part of the settlement, the Company also agreed to redeem certain preferred securities held by the Company’s 401(k) Plan in exchange for shares of the Company’s common stock.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is a leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 41 on Fortune’s 2022 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.
