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News for Norther Colorado and the world

Wednesday, August 27, 2014

Multi-million multi-state settlement with Wells Fargo to resolve bid-rigging allegations

Attorney General announces $58.75 million multi-state settlement with Wells Fargo to resolve bid-rigging allegations

DENVER — Colorado Attorney General John Suthers announced today a $58.75 million multistate settlement with Wells Fargo to settle allegations that individuals working at Wachovia, which Wells Fargo acquired in 2008, engaged in anticompetitive conduct in the municipal bond derivatives industry. The settlement is one component of a $148 million coordinated state and federal law enforcement and regulatory action involving the U.S. Department of Justice, the Securities and Exchange Commission, the Internal Revenue Service and the Office of the Comptroller of the Currency. The misconduct covered by this settlement took place prior to Wells Fargo’s acquisition of Wachovia.

As a part of the settlement, Wells Fargo has agreed to pay $54.5 million that will be used to reimburse certain government and nonprofit organizations across the United States who were injured as a result of the allegedly anticompetitive conduct. Wells Fargo also agreed to pay a $1.25 million civil penalty and $3 million to reimburse the states for fees and costs incurred during the investigation.

The ongoing multistate investigation has revealed allegedly collusive and deceptive conduct by individuals at several financial institutions. The conduct included bid rigging, agreements to refrain from bidding, and fraud. Ultimately the conduct resulted in lower yields, lower rates of return, or less favorable terms for government and not-for-profit organizations.

The number of Colorado government and nonprofit entities affected by this settlement and the amount they will receive will be determined in the coming months.

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