|  October 24, 2014  |  
Overcast   35.0F  |  Forecast »

Wells Fargo Reaches Settlement with Regulators

Wells Fargo & Company. (NYSE:WFC) today announced that its subsidiary, Wells Fargo Bank, N.A., reached settlements with the Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), the U.S. Internal Revenue Service (IRS), U.S. Department of Justice (DOJ) and a group of state Attorneys General to resolve their previously disclosed investigations into the conduct of certain former employees in Wachovia Bank’s former municipal reinvestment and derivatives group prior to its merger with Wells Fargo.
 
Wells Fargo is pleased to have fully resolved this investigation of Wachovia Bank. The underlying transactions were entered into in a business that existed at Wachovia Bank, which Wells Fargo acquired in 2008, and involved employees who are no longer with the firm.
 
The total amount of the settlement is $148,243,013. Under the terms of the settlements, Wells Fargo will pay the settlement amount as follows: $8.9 million to the IRS; $46.075 million to the SEC, $34.518 million to the OCC; and an additional $58.75 million to the state Attorneys General. As previously disclosed, Wells Fargo has also resolved, subject to Court approval, related civil litigation pending in the U.S. District Court for the Southern District of New York for $37 million. The payments will not have an adverse effect on Wells Fargo’s financial results and the settlement will not adversely affect the conduct of any current business of Wells Fargo.
 
Wells Fargo cooperated fully in this investigation into alleged coordination among market participants in the industry. Wells Fargo does not endorse, ratify or condone anticompetitive activity or other violations of law, and Wells Fargo policies (both currently and during the period in question) expressly prohibit such conduct.
 
ADDITIONAL INFORMATION ABOUT THE IRS AGREEMENT
Wells Fargo Bank, N.A., successor by merger to Wachovia Bank, N.A., has agreed to a settlement with the IRS under which it will pay $8.9 million for certain regulatory violations of the Internal Revenue Code committed in connection with Wachovia Bank’s and its predecessor’s role in providing or bidding on guaranteed investment contracts, swaps and other contracts with the issuers of municipal bonds or with entities that borrowed the proceeds of such bonds from the issuer thereof or otherwise were the beneficiaries of such bonds. Such issuers are primarily state and local governments but also include school districts, universities, hospitals and charitable organizations.
This settlement agreement with the IRS is entered to resolve violations of the Internal Revenue Code resulting from Wachovia Bank’s and its predecessor’s participation in anti-competitive practices, such as bid-rigging, in the municipal market in connection with certain investment contracts and derivative transactions.
With respect to compliance by the affected issuers with the arbitrage requirements of Section 148 of the Internal Revenue Code, under the settlement agreement the municipal investment and swap contracts associated with a State or Local bond entered into with Wachovia Bank or its predecessors, during the period 1993 to 2006 are deemed to have been entered into on terms which represent the fair market value of such contracts. In addition, payments to issuers of any restitution or settlement fund payments related to such contracts need not be included in the gross proceeds of the related bond issue.
 
About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With approximately 280,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.

Add your comment:
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement