Wells Fargo To Pay $6.5M To Settle SEC Charges Over MBS

Law360, New York (August 14, 2012, 1:46 PM EDT) -- Wells Fargo & Co. has agreed to pay $6.5 million to settle allegations by federal regulators that it sold complex investments linked to mortgage-backed securities without fully understanding them and without warning investors of their potential risks, the U.S. Securities and Exchange Commission announced Tuesday.

In 2007, when the U.S. housing market was melting down, the bank's brokerage arm sold asset-backed commercial paper structured with risky mortgage-backed securities and collateralized debt obligations to municipalities, nonprofits and other relatively risk-adverse customers, according to the SEC. But Wells...
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