Wells Fargo & Co. is set to ask a federal judge today to cancel the class-action status he approved for institutional investors, claiming that the bank marketed a risky securities-lending program as being safe, Bloomberg News reported today. U.S. District Judge Donovan W. Frank in St. Paul, Minn., certified the case as a group lawsuit last year, finding that common issues predominated, including whether Wells Fargo “knew or should have known that the investments it selected did not comport with investment mandates.” The case was filed in 2010 by the City of Farmington Hills Employees Retirement System, a Michigan pension fund, on behalf of more than 100 other institutional investors, claiming breach of fiduciary duty and fraud. Wells Fargo is asking Judge Frank to revisit his decision to allow the plaintiffs to pursue their action together instead of individually, giving them greater leverage to obtain a settlement. The bank is also seeking dismissal of multiple investor claims.
