A jury in federal court in St. Paul handed Wells Fargo & Co. a victory Thursday, clearing the bank of liability for the losses several plaintiffs suffered in its former securities lending program.
The San Francisco-based bank, which had marketed the program to institutional investors such as pension funds, was sued in 2011 by a group of 13 investors claiming the bank mismanaged the program and lied about the safety of the investments. The bank had argued that the unit had a good track record until the financial crisis hit.
Ten jurors took about a day and a half to reach their verdict after a seven-week trial.
Wells Fargo issued a statement Thursday saying the verdict supports its position that the investments were "prudent and suitable."
"Wells Fargo worked very hard and responsibly to achieve the best results for all participants in the securities lending program during extremely difficult economic conditions," Wells Fargo spokeswoman Peggy Gunn said in a statement.
Gunn said the Wells Fargo securities lending program had losses averaging approximately 3 percent at the same time the markets were down up to 50 percent during the height of the financial crisis.
There are least three other ongoing lawsuits in Minnesota over the bank's former multibillion-dollar securities lending program, which was run out of Minneapolis.
The jury trial was focused on claims by just six of a group of 13 institutional investors that originally sued Wells Fargo in 2011, those that are not covered by the federal Employees Retirement Income Security Act (ERISA).
