Wells Fargo in $105 million pact over Medical Capital: court papers

Published April 30, 2013

| Reuters

Wells Fargo & Co agreed Tuesday to pay $105 million to settle an investor lawsuit over its role as trustee for debt issued by a financing company that fell apart in a billion-dollar fraud in 2009, court papers show.

The settlement, disclosed in court papers filed in U.S. District Court in Santa Ana, California, followed a judge's decision earlier this month rejecting Wells Fargo's bid to dismiss the case.

The lawsuit stemmed from the collapse of Medical Capital Holdings Inc. The U.S. Securities and Exchange Commission sued Medical Capital and two executives for fraud in July 2009, and the company was soon shut down.

The investors, who had bought notes issued by three Medical Capital special purpose companies, had reached a $114 million settlement with Bank of New York Mellon Corp in February.

(Reporting by Nate Raymond in New York; Editing by Bernard Orr)

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