Posts belonging to Category Wells Fargo

Wells Fargo Settles Medical Capital Class Action for $105 Million


InvestmentNews reports that Wells Fargo & Co. has agreed to pay $105 million in a class action lawsuit brought by investors who purchased Medical Capital notes.  The notes turned out to be a fraudulent medical receivables scheme. The note holders alleged that Well Fargo, one of two trustee banks in the scheme, failed to protect […]

Wells Fargo Fined for Selling Unsuitable Investments to Municipalities and Non-Profits


Wells Fargo agreed to pay more than $6.5 million to settle SEC charges that it sold commercial paper backed by mortgage securities and collateralized-debt obligations to municipalities, nonprofit institutions and other customers without first understanding the substantial risks of those securities. The securities were unsuitable because the investors had a low risk tolerance. Three of […]

Case Reveals How Wall Street Banks Cheated Municipalities out of Billions of Dollars


The former co-head of UBS AG’s municipal-derivatives group, and two ex-colleagues are defendants in a municipal bond bid-rigging case being tried before U.S. District Judge Kimba Wood in Manhattan (“Ex-UBS execs on trial in muni bid-rigging case,” InvestmentNews).

Regulators Sanction Major Wall Street Firms for Improper Sales of High-Risk ETFs


The Financial Industry Regulatory Authority (FINRA) announced that it ordered Citigroup Global Markets, Morgan Stanley, UBS Financial Services, and Wells Fargo Advisors to pay more than $9.1 million for failure to supervise and failure to have a reasonable basis for recommending selling leveraged and inverse exchange traded funds. Each of the four firms sold billions […]

Is the SEC Too Soft on Major Wall Street Firms?


Questions continue to arise regarding the too-cozy relationship between the SEC and Wall Street. Recent reports claim that the SEC, when settling with big Wall Street firms, has a practice of granting waivers that preserve special privileges enjoyed by those firms, and protect them from serious consequences that would otherwise result from their wrongdoing. For […]

Are Wall Street Wirehouses ‘Killing the Goose that Laid the Golden Egg?’


The big four Wall Street wirehouses have lost market share since the financial crisis in part because of their role in the crisis and “customer distrust,” according to Bing Waldert, a director of Cerulli Associates Inc. (See “Wirehouse market share has shriveled since crisis,” InvestmentNews). Merrill Lynch Wealth Management, Morgan Stanley Smith Barney, UBS AG […]

Securities Regulators Fine Wells Fargo $2 Million for Elder Fraud


The Financial Industry Regulatory Authority (FINRA) has fined Wells Fargo Investments $2 million and ordered it to pay restitution to customers for unsuitable sales of reverse convertible securities, and other misconduct. The reverse convertibles sales involved one broker and 21 customers with 172 accounts. Seventy one percent of the customers were over 80 years old. […]

Wells Fargo Pays $148 Million for Defrauding Municipalities


Wells Fargo will pay $148 million to settle charges that its Wachovia Bank unit conspired to rig bids on investment contracts for municipalities. (“Wells to Pay $148 Million to Settle Wachovia Bid-Rig Case,” Wall Street Journal). As part of the settlement, the Justice Department will not prosecute the bank. Wachovia reportedly admitted and accepted responsibility […]

Risks Increase for Structured Products Involving Bank of America, Citigroup and Wells Fargo


The risks are increasing for investors in principal protected notes, reverse convertibles and other structured products associated with Bank of America, Citigroup and Wells Fargo. Moody’s recently announced that it has downgraded the debt of those financial institutions. One reason given: the U.S. government is unlikely to bail them out again. “It is more likely […]

Reverse Convertible Securities More Likely to Become Toxic as Market Swoons


The current free fall in the stock market is likely to activated the ticking time bombs that are hidden away in some investors’ portfolios. These time bombs are embedded in a type of structured product called Reverse Convertible Notes or Reverse Exchangeable Notes. The problem has to do with the way these products are structured.