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U.S. securities trading regulator charges Wells Fargo with improper investments sales

08-15-2012 08:25 BJT

WASHINGTON, Aug. 14 (Xinhua) -- U.S. Securities and Exchange Commission (SEC) Tuesday charged an brokerage arm of Wells Fargo, one of the leading banks in the States, for selling investments tied to mortgage-backed securities without fully disclosing the risks to investors.

The SEC alleged that Wells Fargo Brokerage Services (now Wells Fargo Securities) improperly sold asset-backed commercial paper ( ABCP) structured with high-risk, mortgage-backed securities and collateralized debt obligations (CDOs) to investors from January to August 2007, but the company failed to disclose the risks and complexity of these products.

The regulator said that municipalities and other non-profit institutions were harmed by the misconduct of the Wells Fargo brokerage subsidiary, but failed to elaborate.

Without admitting or denying the findings, Wells Fargo agreed to pay more than 6.5 million U.S. dollars to settle the case, adding that it had taken remedial measures since 2007 to ensure relevant information would be fully disclosed to investors, according to sources with the SEC.



Editor:James |Source: Xinhua

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