Wachovia shareholders get zilch in class action suit over bank sale
A North Carolina business court judge has approved a settlement in a lawsuit brought by Wachovia shareholders angry at the bank's acquisition by Wells Fargo. However, WFAE's Julie Rose reports the settlement is far from what shareholders had hoped: With about 10,000 shares of Wachovia stock, Joseph Johnson wasn't big enough potatoes to have a direct line to the CEO. But those shares were a big deal to him - particularly the regular stock dividend: "It paid my health insurance," says Johnson, a Charleston businessman. Like a lot of Carolinians, Johnson says his family invested for decades in Wachovia because it was homegrown and seemed safe. "It was a very nice feeling on a cold winter night to have that amount of money in a bank that was so prosperous," says Johnson. "I mean every time you looked around it was doing something better." Until 2008, that is, when Wachovia was hurriedly swallowed by Wells Fargo for $15 billion. Johnson says to him, it came largely without warning: "No one in their right mind would have kept the stock if they knew it was going to go to zero- or close to zero," says Johnson. "We were all misinformed and the investors have been trounced." Johnson and numerous other angry Wachovia shareholders hoped to get some of their money back in a class action lawsuit against the bank. But a North Carolina judge has ruled they won't get a penny. The judge reasoned that the shareholders had originally filed the lawsuit hoping to stop the merger. When that failed, shareholders were given additional information about the deal before they had to vote. That was their reward for filing the lawsuit, says the judge in his written order. Only the New York law firm that represented the shareholders will get anything - about a million dollars in fees. What's more, the settlement prohibits the shareholders from bringing other lawsuits against Wachovia over the merger.