Wells Fargo, BofA Pay to Settle Fraud Claims

Discussion in 'Wall St. News' started by ASusilovic, Jun 9, 2009.

  1. Wells Fargo & Co. and Bank of America Corp. agreed Monday to settle claims that employees misled investors about the value and safety of certain securities during the financial crisis.

    Wells's Boston-based mutual fund Evergreen Investment Management Co. agreed along with its brokerage unit to pay $40 million to end civil state and federal securities-fraud allegations that it overvalued the holdings of its Evergreen Ultra Short Opportunities Fund and then, when it was going to lower the value of the securities, informed only select investors -- many of them customers of an Evergeen affiliate -- allowing them to cash out of the fund and lessen their losses.

    Separately, Bank of America agreed to "facilitate" the return of more than $3 billion to California clients who purchased auction rate securities, an investment that went sour last year amid a liquidity freeze. The bank reached the agreement with the California Department of Corporations.

    "We are pleased that the outcome of these negotiations will result in the return of money to many investors who suffered by the freezing of their assets when the auctions failed," said California Department of Corporations Deputy Commissioner Alan Weinger. A bank spokeswoman couldn't be reached for comment.

    The Wells case highlights the valuing of securities as a key issue during the financial crisis as banks, hedge funds and now mutual funds have failed to take losses on their holdings even though there was evidence in the market these securities were trading at lower prices.

    In one case Evergreen, which had $164 billion in assets at the end of the first quarter, was holding a security at nearly full value when another fund at the firm purchased a similar security for 10 cents on the dollar.


    Of course, NOBODY is jailed for this obvious fraud ! :mad: :mad:
  2. Where do i get my IRA losses back that were due to the banks tanking the market?

    oh wait, only democratic constituencies get free money these days... never mind.
  3. patchie


    Somehow those morons in the Boston SEC Office are still under the impression that it is the 'brick and mortar' of a company that commits fraud that is why the 'brick and mortar' and not flesh and blood employees are held accountable.

    So how was it decided who would and who would not be notified of the writedowns?

    Wachovia Securities is loaded with crooks anyway - look at the $9 Billion ARS settlement they agreed to without anybody being held responsible.