New York Paralegal Blog

Washington, D.C., April 5, 2011 – The Securities and Exchange Commission today announced that Wells Fargo Securities LLC agreed to settle charges that Wachovia Capital Markets LLC engaged in misconduct in the sale of two collateralized debt obligations (CDOs) tied to the performance of residential mortgage-backed securities as the U.S. housing market was beginning to show signs of distress in late 2006 and early 2007. The SEC’s order found that Wachovia Capital Markets violated the securities laws in two respects. First, Wachovia Capital Markets charged undisclosed excessive markups in the sale of certain preferred shares or equity of a CDO called Grand Avenue II to the Zuni Indian Tribe and an individual investor. As detailed in the order, Wachovia Capital Markets marked down $5.5 million of equity to 52.7 cents on the dollar after the deal closed and it was unable to find a buyer. Months later, the Zuni Indian Tribe and the individual investor paid 90 and 95 cents on the dollar. Un...

NEW YORK, NY (August 15, 2008) - Attorney General Andrew M. Cuomo today announced another agreement to provide liquidity to consumers who purchased auction rate securities. Under the latest agreement, Wachovia Securities, LLC and Wachovia Capital Markets, LLC (collectively, “Wachovia”) will return over $8.5 billion to investors across New York State and the nation. The agreement settles allegations that Wachovia made misrepresentations in its marketing and sales of auction rate securities. Wachovia marketed and sold auction rate securities as safe, cash-equivalent products, when in fact they faced increasing liquidity risk. Within the past eight days, Cuomo has signed agreements restoring nearly $35 billion of liquidity to thousands of investors nationwide. Under Cuomo’s settlement, Wachovia has agreed to buy back, no later than November 28, 2008, all illiquid auction rate securities from all Wachovia retail customers, charities, and small businesses. Wachovia will also pay damages to ...