According to reports, Wells Fargo has agreed to pay $6.5 million to settle SEC charges that its brokerage firm improperly sold mortgage-backed securities to municipalities, non-profits and other customers.
The SEC alleged in charges it recently filed that Wells Fargo sold the securities — which were the focal point of the great financial collapse of 2008 — without fully understanding their complexity or disclosing the risks to investors.
The SEC further alleged in selling the products that Wells Fargo failed to do adequate due diligence and relied almost exclusively upon their credit ratings, which noted that the Wells Fargo sold the risky products to investors with generally conservative investment objectives.
The sales apparently took place between January and August in 2007.
Wells Fargo consented to the SEC’s order without admitting or denying the findings. Wells Fargo agreed to pay a $6.5 million penalty, $65,000 in disgorgement, and $16,571.96 in prejudgment interest.
The foregoing information is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.