Tuesday, August 14, 2012

Wells Fargo fined for selling securities without understanding them

Wells Fargo was fined $6.5 million by the Securities and Exchange Commission after the bank's brokerage firm sold complex investments tied to mortgage-backed securities without fully understanding or disclosing their risks, the regulator announced Tuesday.

Instead, the bank relied solely on credit ratings, the SEC said. The investments were sold to cities and non-profits between January 2007 and August 2007.

“Broker-dealers must do their homework before recommending complex investments to their customers,” said Elaine C. Greenberg, head of the SEC's  municipal securities and public pensions unit in the enforcement division, in a statement. “Municipalities and other non-profit institutions were harmed because Wells Fargo abdicated its fundamental responsibility as a broker to have a reasonable basis for its investment recommendations to customers.”

Former Wells vice president Shawn McMurtry was also charged in the case. The SEC found that he violated the bank's policy in recommending the investments. He will be suspended from the securities industry for six months and pay a $25,000 penalty.

Wells Fargo and McMurtry neither admit nor deny guilt in the settlement.

The SEC also found that the bank has taken steps since 2007 to prevent similar situations.


Anonymous said...

So if the amount of fraud was $700 million, that represents a 10000% return on "investment" based on the fine.

More proof that the SEC and Dept. of "Justice" are wholly-owned subsidiaries of Banker Scum Inc.

Anonymous said...

How about some "claw-back" from some of the executives in charge of this department?

Anonymous said...


Ha ha ha. You funny.

Those guys probably got million dollar bonuses, from which they made SuperPAC donations to the Obamney campaign.

Anonymous said...

A meager $6.5 million fine!!! That wasn't even enough to fine them at all. Wells Fargo had that much in their "piggy bank." Guess the SEC just needed a little pocket change to go to Vegas and back. CROOKS CROOKS CROOKS all on the back of HONEST AMERICANS trying to live day to day.