In a landmark legal judgment that could reshape fiduciary standards for financial institutions, Wells Fargo has been ordered to pay $832 million in damages after a Florida jury found the banking giant guilty of mismanaging a multi-billion-dollar trust fund intended for approximately 2,000 Seminole children.
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The fund, known as the Seminole Minors Per Capita Payment Trust, was established by the Seminole Tribe of Florida to preserve the financial futures of tribal youth, primarily from revenues generated by the tribe’s gaming operations.
Wells Fargo Hit With $825 Million in Damages Plus Over $7 Million in Unauthorized Fees
According to court records, the jury awarded:
- $825 million in compensatory damages
- More than $7.6 million in restitution for unauthorized fees
In addition, eight Wells Fargo executives were held personally accountable, though they were ordered to pay nominal damages ranging from $50 to $500 each, likely symbolic of their individual roles in the broader misconduct.
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Jury Finds Wells Fargo Breached Fiduciary Duty and Collected Unauthorized Fees
The lawsuit alleged that Wells Fargo and its executives breached fiduciary duty, mismanaged investments, and levied millions in fees without approval, all while failing to properly safeguard the interests of the children the trust was designed to protect.
A bombshell moment came during cross-examination when Wells Fargo relationship manager Kim Scott admitted to several damaging points:
- The bank knowingly mismanaged funds
- Maintained inadequate financial records
- Collected unauthorized fees without full knowledge of the trust’s governing documents
- Had never fully reviewed the Trust’s guidelines, despite overseeing one of the bank’s largest accounts
These admissions were instrumental in shaping the jury’s final decision, highlighting systemic negligence and lack of due diligence.
Wells Fargo Removed as Trustee After Disappointing Returns and Internal Review
The Seminole Tribe terminated Wells Fargo’s role as trustee in 2016 following an internal review. Officials found that the bank’s investment strategy yielded returns that barely kept up with inflation, raising concerns about the financial future of the children the trust was designed to support.
In addition to underwhelming returns, the Tribe identified unauthorized fees totaling $7.6 million, sparking the legal battle that ultimately led to the recent verdict.
Wells Fargo Plans to Appeal: “We Followed the Tribe’s Instructions”
Despite the jury’s ruling, Wells Fargo remains defiant. A spokesperson for Wells Fargo’s Wealth and Investment Management division, Meghan McDonald, issued a statement expressing the bank’s intention to appeal the verdict, claiming:
“We followed the [Seminole] Tribal Government’s clear and repeated instructions about the management of the trust, abided by our fiduciary duty, and delivered financial results consistent with the Trust’s mandate for the children of the Tribe during our time as Trustee.”
McDonald added that the bank aims to challenge several courtroom rulings that allegedly prevented the bank from fully presenting its defense.
A Trust Worth Nearly $3 Billion — and a Legal Battle with National Implications
The Seminole Minors Per Capita Payment Trust was originally established nearly two decades ago, with Wachovia Bank serving as trustee. Following Wachovia’s acquisition in 2008, Wells Fargo assumed full responsibility for the trust.
Funded by revenue from the Seminole Tribe’s successful gaming operations, the trust today is estimated to hold nearly $3 billion in assets — making it one of the largest tribal child trust funds in the country.
The case sets a powerful precedent and serves as a wake-up call for institutional trustees managing high-value accounts involving minors and indigenous communities.
Final Thoughts: A Major Setback for Wells Fargo’s Trust Business
This $832 million verdict against Wells Fargo is among the largest fiduciary breach judgments in recent history and adds to a string of public controversies the bank has faced in the past decade. From fake account scandals to regulatory fines, Wells Fargo has repeatedly faced criticism for failing to uphold ethical and legal responsibilities.
As the bank moves to appeal the decision, tribal leaders and legal experts are hopeful the ruling will bring stronger oversight and reform to trust management practices, especially when vulnerable populations are involved.