Wells Fargo & Co. did not breach its fiduciary duty when several pension funds lost money through the bank's securities lending program, a federal court judge in St. Paul, Minn., has ruled.
U.S. District Judge Donovan Frank, in an order filed last week, ruled against the $256 million Blue Cross Blue Shield of Minnesota Pension Equity Plan, St. Paul, and six other pension funds suing Wells Fargo in 2011 over losses sustained from investments the firm made with securities-lending proceeds.
A federal court jury in August ruled in favor of Wells Fargo in suits filed by six other investors not covered by the Employee Retirement Income Security Act. Last week's ruling involved ERISA-bound plans, according to court documents.
Mr. Frank said he was required by law to adopt the decision reached in August even though he heard those claims separately. “Significantly, however, the court notes that if it were not so bound, the court would find, based on the evidence presented at trial, that defendant breached its fiduciary duties to the ERISA plaintiffs,” Mr. Frank wrote in a footnote.
At least three other lawsuits are pending in Minnesota on Wells Frago's now-defunct securities lending program. Its securities lending team joined BNP Paribas Securities Services in 2013.
Other plans covered by Mr. Frank's ruling were the combined $766 million Twin City Hospitals-Minnesota Nurses Association Pension Plan and Twin City Hospitals Licensed Practical Nurses Pension Plan, $699 million International Truck and Engine Corp. Retiree Supplemental Benefit Plan, $510 million Meijer Pension Trust, $164 million Tuckpointers Local 52 Pension Fund Trust and $5.4 million Jennie Edmundson Memorial Hospital Pension Plan.