Wells Fargo & Co. has agreed to pay $148 million to settle claims arising out of a big-rigging scheme by Wachovia Corp. San Francisco-based Wells Fargo acquired Wachovia Bank in 2008. Federal agencies, including the Securities and Exchange Commission and the Justice Department, as well as Attorneys General in 26 states, were investigating Wachovia for overcharging governments for investment services. The government accused the bank of bid-rigging in connection with investments sold to public entities.
Alabama government entities will collect more than $1.1 million from the settlement. As most in Alabama will recall, Wachovia was a major banking giant in Birmingham after acquiring Magic City-based SouthTrust Corp. in 2004. This settlement concludes a five-year investigation into how Wall Street banks conspired to maximize income on investments they sold to public agencies through rigging competitive auctions and allocating the market among themselves.
Previously, JPMorgan Chase & Co. had settled a similar case. I wonder if the GOP members of Congress are aware of how truly bad the big banks really were and how poor the government’s regulation has been. That regulation aided and abetted the wrongdoing by the big banks. Hopefully, there are enough Senators and Representatives who are not so tied to the big banks that they will help take the necessary steps to achieve badly-needed and stronger regulation of these banks.
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