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Wells Fargo to Pay $79 Million to End Deferred Compensation Suit

Feb. 3, 2020, 4:19 PM

Wells Fargo & Co. will pay $79 million to settle a class action covering more than 1,000 former financial advisers who said they were wrongly forced to forfeit deferred compensation when they left the company, the parties told a federal judge in South Carolina.

The Jan. 31 settlement resolves a lawsuit by former financial adviser Robert Berry, who said he gave up nearly $200,000 in deferred compensation when he resigned from the company in 2014. Berry says the plan’s forfeiture provision violated the Employee Retirement Income Security Act, while Wells Fargo maintained that the plan was largely exempt from ERISA as a “top hat” plan for high-level employees.

The parties reached a settlement after mediation with Hunter Hughes III, a familiar face in high-profile retirement plan litigation. Hughes recently brokered multimillion-dollar ERISA settlements in cases involving JPMorgan ($75 million); Philips North America ($17 million); and Vanderbilt University ($14.5 million).

The deal allows Berry’s lawyers to seek nearly $24 million in attorneys’ fees.

The case is pending before Judge Joseph F. Anderson Jr. of the U.S. District Court for the District of South Carolina.

Berry is represented by Ajamie LLP, Izard Kindall & Raabe LLP, and Motley Rice LLC. Wells Fargo is represented by Seyfarth Shaw LLP and Haynsworth Sinkler Boyd.

The case is Berry v. Wells Fargo & Co., D.S.C., No. 3:17-cv-00304, motion for settlement approval 1/31/20.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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