Wells Fargo Bank will appeal Tuesday’s landmark verdict awarding more than $800 million to a trust fund benefiting the children of the Seminole Tribe of Florida, a decision that came after a six-week trial in Broward County, a bank spokeswoman said.
“We followed the 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,” said Meghan McDonald, spokeswoman for the bank’s Wealth and Investment Management department. “Our goal for the appeal is to address multiple courtroom rulings that we believe prevented us from sharing the full story with the jury.”
Jurors deliberated for about six hours on Tuesday before reaching their decision, which weighed six weeks of testimony from financial experts, Tribe leaders and bank officials who explained the bank’s decisions to invest the Tribe’s money in a way guaranteed to minimize risk. The bank’s investment strategy resulted in returns that barely kept pace with inflation from 2005, when the Minors Per Capita Payment Trust was established, until 2016, when the Tribe began accusing the bank of mismanagement and excessive, illegal fees.
Closing arguments on Monday centered on the question of whether the bank officials’ investment strategies fulfilled their duties under the provisions of the trust, with the jury ultimately deciding the answer was no. Eight bank officials were also sued by name, but the jury ordered them to pay only token damages of $50 to $500 each.
Jury orders Wells Fargo to pay Seminole children’s trust $826 million
Between the investment damages and improper fees, the jury awarded the plaintiffs $831 million, according to their lawyers. With interest calculated back to 2016, the award is likely to be well over $1 billion.
Legally, the plaintiffs were the beneficiaries of the trust, not Tribe leaders, said William Scherer, lead plaintiffs’ attorney. Scherer and law partners Steven Osber and Irwin Gilbert each focused on different aspects of the complex case. It was Gilbert who told jurors during closing arguments that an $800 million award was warranted by the evidence under a less conservative investment strategy, and that such an award was reasonable when considering it’s divided among more than 2,000 children who came of age while the trust was under the management of Wells Fargo and its predecessor, Wachovia Bank. Each child entitled to a payout from the trust would have benefited by roughly $30,000 a year.
“I was given an awesome responsibility in this case to make the case for those children,” Gilbert said.
The plaintiff’s lawyers successfully argued that the bank officials were bound to act in the best interest of the beneficiaries of the trust, not the Tribe leaders who told them to minimize risk to the principal amount that was invested.
The trust had assets of about $1.4 billion in 2016, when it should have been more than $2.2 billion, Gilbert argued. The Trust is funded by income from the Tribe’s gaming interests across the state, including casinos in Hollywood, Tampa and Okeechobee.
Children of Tribe members receive a payout when they reach maturity, which was considered age 24 by the terms of the trust in 2016. Before they receive payment, they must take a financial management course and demonstrate that they are drug-free. The age of maturity is now 30.
Rafael Olmeda can be reached at rolmeda@sunsentinel.com or 954-356-4457. Follow him on Threads.net/@rafael.olmeda.
