Wells Fargo Settles Wachovia Bid Rigging Case for $148 Million
Wells Fargo agreed on Thursday to pay $148 million to settle charges that its Wachovia unit, which it acquired in 2008, engaged in extensive bid rigging and other illegal practices within the municipal bond market. The agreement includes a $48 million payment to the Securities and Exchange Commission, and separate payments to the Justice Department, and various other state and federal agencies totaling $102 million.
Officials said that Wachovia rigged at least 58 municipal bond reinvestment deals between 1997 and 2005. The bid rigging occurred in 25 states and Puerto Rico, according to a source close to the investigation, and mainly involved a practice known as "last looks," where it was informed of the amounts of competing bids prior to making its final offer for municipal bonds.
Attorneys representing Wells Fargo were quick to point out that the bank was agreeing to the settlement without admitting or denying any wrongdoing. "Wells Fargo is pleased to have fully resolved this investigation of Wachovia Bank," read a statement from the bank, which also noted that all employees involved with the bid rigging have since been terminated. Wells Fargo had recently settled civil suits related to the bid rigging for $37 million.
With Thursday's Wells Fargo settlement, the SEC has now reached settlements worth $673 million related to corruption in the municipal bond market. Other notable settlements include a $228 million agreement with JP Morgan Chase, $160 million from UBS, and $137 million from Bank of America.
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