Wells Fargo Securities has become the second Wall Street firm to settle with regulators over its sale of the toxic mortgage derivatives at the heart of the credit crisis.
The investment bank, which was called Wachovia before its collapse and takeover by Wells Fargo in 2008, was accused by the Securities and Exchange Commission of misleading investors in a collateralised debt obligation (CDO), a derivative based on mortgage assets that the bank secretly transferred at above-market prices. It also charged an "excessive mark-up" on another CDO, the SEC said.
The bank will pay a fine of $11m. Last year, Goldman Sachs paid $550m to settle fraud charges over one of its CDOs.Reuse content