Wells Fargo Target Of Class Action Lawsuit For Failing To Pay Customers Highest Available Interest Rate For Money Market And Cash Sweep Accounts

An investor has filed a Class Action Complaint against Wells Fargo in the Northern District of California alleging that Wells Fargo failed to pay the highest-available interest rate on the cash balance in customer accounts.

The Class Action Complaint, filed July 31, 2024, alleges that Wells Fargo breached its fiduciary duties to customers, breached its contract with certain accountholders, and was unjustly enriched via the alleged misconduct.

Silver Law Group Investigating Claims Involving Money Market And Cash Sweep Violations By Major Wall Street Firms

Millions of accountholders worldwide participate in money market, cash sweep, or bank deposit sweep programs at their banks and brokerage firms. The programs generally entail rolling a customer’s cash balance into an interest-bearing account.

The Wells Fargo class action alleges that the annual percentage yields available in these accounts ranged from 0.05% to 0.5%, depending on the amount of deposited cash. Similar options were available to accountholders at most other banks and investment firms. The alleged problem: the past few years have featured surging interest rates, but the banks have kept the profits, allowing their customers to earn less than 1% while keeping billions of dollars for themselves.

Banks And Investment Firms Owe Their Clients Duties To Act In Their Best Interest Or Pay Reasonable Interest

Amongst other allegations in the Wells Fargo class action, the plaintiff lists three core obligations that Wells Fargo owes its clients:

• Wells Fargo owes certain clients a fiduciary duty, requiring it to act for its client’s benefit and not in its own self-interest
• Wells Fargo is required to act in the “best interests” of its clients pursuant to a recently passed regulation called Regulation Best Interest or “Reg. BI”
• For certain retirement accounts, Wells Fargo was contractually bound to pay a “reasonable rate of interest”

Silver Law Group is investigating claims that Wells Fargo, amongst dozens of other banks and brokerage firms, owed similar duties and engaged in similar misconduct.

The Wells Fargo class action alleges that customers could have earned upwards of 4%, and in some cases nearly 5%, on their cash. This differential has cost bank and brokerage accountholders millions, if not billions, of dollars.

The class action alleges that Wells Fargo actually boosted its rates of return in 2023 amidst an SEC investigation into its cash sweep programs.

Let Silver Law Group Help Recover Your Losses

Our team of investor advocates can help you recover improper losses such as your bank’s or investment firm’s failure to pay adequate interest rates. Our team of leading securities attorneys routinely meet with clients by telephone and videoconference and are capable of representing investors in individual claims and/or class action lawsuits nationwide.

Most cases are handled on a contingency fee basis, meaning you wont owe us any money unless and until we recover for you.  Your consultation is also free and confidential.

If your bank wasn’t paying you the best interest rate on your cash over the past several years, or to find out if you may have a claim, call Silver Law Group toll free at (800) 975-4345 or email ssilver@silverlaw.com or visit us at www.securitiesfraudattorneys.com.