Wells Fargo Settles Lawsuit Over Auction-Rate Securities – DealBook Blog – NYTimes.com


Wells Fargo said on Wednesday that it had agreed to buy back $1.4 billion in auction-rate securities it sold to investors before the market for those securities dried up last year.The decision settles a lawsuit brought against the firm by California’s attorney general for violating the state’s securities laws. Wells Fargo also agreed to pay the state’s expenses related to the lawsuit.The brokerage arm of the bank marketed the securities, which resemble corporate debt and whose interest rates were regularly reset by auctions, as an alternative to cash for years, even after analysts warned that the market could freeze up. In February 2008, banks stopped participating in the auctions and effectively locked up investors’ cash.The suit, brought by the California attorney general, Jerry Brown, contended that Wells Fargo routinely misrepresented, marketed and sold auction-rate securities as safe, liquid and cashlike investments, omitting material facts.“Wells Fargo convinced thousands of investors to purchase auction-rate securities with promises of robust returns and liquidity, but when the market collapsed, investors were left out in the cold,” Mr. Brown said in a statement. “Based on misleading advice, investors bought these risky securities. Now, retail investors and small businesses are finally getting their money back.”Under the terms of the settlement, Wells Fargo agreed to buy back at par value by April 2010 all auction rate securities purchased through its brokerage unit by investors before the market froze up.About half of the auction-rate securities sold by Wells, which is headquartered in San Francisco, were bought by California residents.

via Wells Fargo Settles Lawsuit Over Auction-Rate Securities – DealBook Blog – NYTimes.com.

This is apart from the hidden bonus in the healthcare bill over the redefinition of San diego and other California metros as rural etc costing $300 million to Obama’s administration. A good day for Californians!

Advertisements

About zyakaira

Investment Banker, 40s, Bangalore This Biopic and this web recreates how one point of view, one person can impact a tremendous economic engine that the world thrives and mis-thrives on. This one has the knowledge and the civil sense , the art of conversation and some good writing to mentor others as powerful and help global managers develop and fine tune their approach on US markets, China, India and the world. Read on here, and let me know what you need. It can be a race for TRPs, a race for new markets and a race to do what is right. I have the pulse of the crisis, the recovery and the market direction and can help you build and refine your strategy as i have helped thousands of managers and multiple global corporations. Of course, it’s more fun if you talk to me. I am in favor of leading this moving of the economic crisis and will partner with you in a soft and subtle way, just the way we both ride to the top. But you can write with us, opine and just reply with aplomb and shine on Twitter , 4 square , Facebook and any other social “choupal” of choice via zyaadakairaada Profile & Portfolio - SocialPicks Different flavours at: http://benchilibowl.wordpress.com http://zyaada.mp

Posted on November 19, 2009, in Bank Stocks, US and tagged , , , , . Bookmark the permalink. Leave a comment.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: