Wells Fargo Reaches Agreement with U.S. Department of Labor Related to Legacy 401(k) Plan Matter
Posted on 09/12/2022
Wells Fargo & Company 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. Wells Fargo strongly disagrees with the DOL’s allegations and believes it followed applicable laws in conducting the transactions. Though the bank 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 bank.
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 Wells Fargo stock at issue.
The agreement provides that Wells Fargo 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 Wells Fargo’s common stock.