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Wells Fargo Turned to Sullivan & Cromwell Ahead of $1B Consumer Settlement

[caption id="attachment_13401" align="alignnone" width="620"] Wells Fargo in San Francisco. Credit: Mike Scarcella/ ALM [/caption] Wells Fargo & Co. turned to Sullivan & Cromwell for the negotiations with financial regulators that ended in Friday's $1 billion agreement to resolve various mortgage and auto-lending abuses, according to a source familiar with the matter. The settlement with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency comes two years after those agencies fined Wells Fargo for opening millions of potentially unauthorized accounts. The $100 million fine Wells Fargo agreed to pay to the CFPB in 2016 had represented the largest penalty in the agency's history.

H. Rodgin Cohen. Credit: Rick Kopstein/ ALM

Among the Sullivan & Cromwell lawyers representing Wells Fargo was one of Wall Street’s most prominent lawyers: H. Rodgin Cohen, the firm’s senior chairman and a go-to adviser for banks in trouble. “You don’t build trust in an hour or a day,” Cohen, honored for an The American Lawyer lifetime achievement award, said last year. “We always try to play absolutely straight with the regulators.” Cohen was joined by Mitch Eitel, managing partner of Sullivan & Cromwell’s financial services group, and Nicolas Bourtin, managing partner of the firm's criminal defense and investigations group, along with Stephen Meyer and Shari Leventhal, special counsels in the financial services group. Wells Fargo senior general counsel Heidi Mason and deputy general counsel Craig Baldauf were also actively involved in the settlement negotiations. A spokesperson for Wells Fargo declined to comment Friday about its legal representation. Wells Fargo vowed to repay customers and improve its compliance practices as part of the settlement. The settlement marked the first enforcement action brought by the CFPB under its President Donald Trump-appointed interim director, White House budget director Mick Mulvaney. At a congressional hearing earlier this month, Democrats questioned Mulvaney’s commitment to the CFPB’s enforcement role, noting the lack of any new cases and his past statements that the agency would no longer “push the envelope.” Mulvaney responded that the CFPB was investigating multiple matters and actively litigating 25 cases. Announcing the Wells Fargo settlement on Friday, Mulvaney said he appreciated the OCC’s role in the settlement negotiations. “As to the terms of the settlement: We have said all along that we will enforce the law. That is what we did here,” he said. Sullivan & Cromwell is no stranger to Wells Fargo's regulatory scrutiny. A Sullivan & Cromwell team is defending Wells Fargo in shareholder litigation over the sales practices at issue in the 2016 settlement. Lieff Cabraser Heimann & Bernstein and Saxena White are co-lead counsel in consolidated actions against Wells Fargo, which are pending before U.S. District Judge Jon Tigar in San Francisco federal court. Sullivan & Cromwell litigation partners Richard Klapper, Brendan Cullen and Christopher Viapiano are counsel for the bank, in addition to Arnold & Porter Kaye Scholer partner Gilbert Serota in San Francisco. Klapper is a former managing partner of the litigation team, and Cullen coordinate the firm’s appellate work. Several firms are defending Wells Fargo in civil suits brought by cities over allegations of discriminatory mortgage lending practices. Those firms include Hogan Lovells, Duane Morris, K&L Gates, Munger, Tolles & Olson and Proskauer Rose. The law firm Skadden, Arps, Slate, Meagher & Flom, along with Munger Tolles, represented Wells Fargo in the 2016 settlement talks with the CFPB and OCC.   Read more: Lifetime Achiever: H. Rodgin Cohen, Sullivan & Cromwell Documents: Feds Hit Wells Fargo for $1B Penalty for Consumer Abuses Wells Fargo GC Allen Parker Helps Restore Integrity to Embattled Financial Giant Compliance Hot Spots: As the CFPB Door Spins | Facebook's Friends Meet the California Whistleblower Lawyer Helping Cities Sue Wells Fargo