Facebook logo
Facebook logo
Facebook logo
Facebook logo

Latest Headlines

Securities Lending Times home | Wells Fargo settles with Sarasota over securities lending feud ← You are here

[close]
Latest News
Trump heralds changing of the guard at SEC
20 January 2017 | Washington DC
The imminent inauguration of Donald Trump as president of the US has signalled a major reshuffle in the highest ranks of US governing bodies... Read more

US and Hong Kong augment data sharing deal
20 January 2017 | Washington DC
The US Securities and Exchange Commission has renewed its ties with the Hong Kong Securities and Futures Commission to further strengthen oversight of entities operating in both markets... Read more

For more news visit our news section

Industry recruitment
Front Office Compliance
Recruiter: Bruin
Location: London
Find out more

Lead Business analyst
Recruiter: Alexander Ash
Location: Midlands
Find out more

For more jobs visit our recruitment section
Securities Lending Times
View the latest issues online now

Sister publications
Asset Servicing Times
www.assetservicingtimes.com

Captive Insurance Times
www.captiveinsurancetimes.com

Real Estate Investment Times
www.realestateinvestmenttimes.com

Media pack [download]
Ad specs [download]
Latest features
Under pressure
Feature: Experts debate the likely effect of monetary policy on repo markets Read more

Mexico
Country profile: Federico Ortega Gilly of Mexico’s Nacional Financiera explains why his country’s securities lending market is ripe for foreign investment Read more

Markus Büttner :: Comyno
Interview: Comyno is integrating distributed ledger technologies into its software to execute the first repo smart contract, as Markus Büttner explains Read more

For more features visit our features section
Latest news
More news
IPPro default image
Wells Fargo settles with Sarasota over securities lending feud
17 December 2012 | Sarasota | Reporter: Mark Dugdale
Wells Fargo will pay Sarasota County $23.75 million to settle claims that Wachovia Bank, which it acquired at the peak of the financial crisis, mismanaged the county’s securities lending portfolio between 2007 and 2008.

Sarasota County’s clerk of court and comptroller, Karen Rushing, filed a complaint against Wachovia in 2010.

Rushing engaged Wachovia in 2006 to enhance the performance of the county’s working capital, but the financial crisis hit in 2008.

Sarasota County alleged that Wachovia negligently invested county funds in Lehman Brothers bonds and a collateralised debt obligation from Altius Funding.

Rushing argued that Wachovia failed to follow the county’s extremely conservative investment guidelines when it invested in Lehman Brothers and Altius.

Wells Fargo assumed the liabilities of Wachovia when it acquired the bank at the end of 2008. It denied the allegations.

The case was scheduled for trial in federal court this month, but the parties have now agreed to settle. In a statement, Rushing said: “I think this is a very good settlement. The settlement resolves the litigation and brings in almost $24 million for the citizens of Sarasota County.”

In a statement, a Wells Fargo spokesperson said that the terms of the settlement agreement will see both parties "making payments to cover losses incurred in the securities lending programme during a time of unprecedented market conditions".

"We strongly believe that the investments made by Wachovia on behalf of its clients in the securities lending programme were in accordance with investment guidelines and were prudent and suitable at the time of purchase. The firm was focused at all times on serving our clients’ interests and we worked very hard and responsibly to achieve the best results for all of the participants in the securities lending programme, during very difficult economic conditions."

"In reaching this settlement with the County of Sarasota, we look forward to putting the matter behind us and focusing on helping our clients navigate the continued challenging market environment."

The bank continues to incur litigation costs since it took over Wachovia. In March, the City of St Petersburg persuaded a jury in Tampa, Florida, that Wachovia acted improperly when the city lost $10 million in Lehman Brothers bonds.

Wells Fargo is currently appealing against that decision, but in the same month—unrelated to Wachovia—a Michigan pension fund filed a suit against the bank alleging that it mis-sold the safeness of its securities lending programme.

Speaking at the time, a spokesperson denied the allegations and said the bank would vigorously defend itself.



Trump heralds changing of the guard at SEC
The imminent inauguration of Donald Trump as president of the US has signalled a major reshuffle in Read more

US and Hong Kong augment data sharing deal
The US Securities and Exchange Commission has renewed its ties with the Hong Kong Securities and Fut Read more

CME boasts record-breaking peso IRS activity
Derivatives marketplace CME Group achieved a record-breaking January trading day by clearing more th Read more

CSDs find new ally for blockchain collateral scheme
Four members of the Liquidity Alliance are collaborating with Deutsche Boerse to build a blockchain- Read more

CalPERS retains Feckner as president
The California Public Employees' Retirement System has re-elected Rob Feckner as board president for Read more

Securities Lending Times site map
Home
Home

Sitemap

Issue archive
Back issues online
Recruitment
Recruitment

Events and Training
Upcoming events

Upcoming training

Company info
About us

Contact us


Copyright (C) 2016 Black Knight Media Ltd. All rights reserved. No reproduction without prior authorization