Wells Fargo joined a long list of banks that will return money to clients whose funds were frozen in the auction-rate-securities market.
The $1.4 billion settlement comes after “more than a dozen” other such settlements totalling $61 billion, The Wall Street Journal reported. Companies previously settling include Bank of America, Citigroup, Credit Suisse Group, Deutsche Bank, J.P. Morgan Chase and UBS.
WSJ: The combined payouts represent the largest return of investor funds in history, according to the North American Securities Administrators Association, a group of securities regulators in the U.S., Canada and Mexico.
Some firms haven’t agreed to settlements of auction-rate-securities investigations, including Charles Schwab Corp., Raymond James Financial Inc. and OppenheimerFunds Inc., majority-owned by Massachusetts Mutual Life Insurance Co.
“We will continue to seek much needed relief for investors who have suffered from the collapse of the ARS markets,” North American Securities Administrators Association President and Texas Securities Commissioner Denise Voigt Crawford said.
Read the WSJ’s full coverage here.
The Am Law Litigation Daily points out a little press release battle going on over who should rightfully take credit for achieving the settlement. California attorney general Jerry Brown issued a release titled “Brown Recovers $1.4 Billion for Wells Fargo Investors In Landmark Settlement.”
But NASAA president and Texas securities commissioner Denise Voight Crawford issued a press release as well. It is titled, “State Securities Regulators Announce $1.3 Billion Settlement with Wells Fargo Investments in Auction Rate Securities Investigations.” (We’re not sure what happenend to the other $0.1 billion.)
Wells Fargo is not taking sides in this particular battle. It said it reached two seperate agreements — one with Brown, one with NASAA — worth a total of $1.4 billion in ARS buy backs nationwide, Am Law reported.
“We have been working with ARS issuers since the auction-rate market froze, and while there has been progress, redemptions by issuers have not occurred as fast as anyone would have hoped or predicted,” Wells Fargo Investments CEO Charles Daggs said. “We are glad to have resolved this for our customers through an actual repurchase of their ARS.”
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