Wells Fargo Fires Back At MedCap Ponzi Class Action

Law360, Los Angeles (March 11, 2013, 9:57 PM EDT) -- Wells Fargo NA asked a California federal judge on Monday to throw out a consolidated class action alleging it breached its contract with noteholders by disbursing their funds to Medical Capital Holdings Inc. in MedCap's $1 billion Ponzi scheme, arguing it wasn't contractually required to notify investors of irregularities until the accounts defaulted.

At a hearing before U.S. District Judge David O. Carter in Santa Ana, Calif., John W. Spiegel, a lawyer representing Wells Fargo, argued that the bank was not liable to the class of...
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