Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


10:30 AM
Connect Directly

Wells Fargo, SEC Told to Meet in Subpoena Dispute

A federal judge rejected the U.S. Securities and Exchange Commission's demand that Wells Fargo & Co comply with subpoenas related to a probe of the bank's sale of $60 billion of mortgage-backed securities, but directed both sides to meet.

In a order dated Thursday, U.S. Magistrate Judge Laurel Beeler in San Francisco directed the parties to try to resolve their dispute, and if they failed to explain why in writing.

On March 23, the SEC had accused Wells Fargo of repeatedly ignoring its subpoenas, six of which had been issued since Sept. 30, and demanded compliance.

The regulator is looking into whether Wells Fargo fraudulently misled investors about the risks of securities it sold from September 2006 to early 2008, including whether the underlying home loans complied with underwriting standards.

Wells Fargo is based in San Francisco, and is the nation's fourth-largest bank by assets and largest mortgage lender.

The bank has not been accused of wrongdoing. It has called the SEC's March 23 demand inappropriate, believing there had been an understanding with SEC staff about the document requests.

Several major US banks have been faulted over their packaging and marketing of mortgage debt that proved riskier than expected. This debt was a major factor in both the 2008 financial crisis and the roughly five-year U.S. housing slump.

The case is SEC v. Wells Fargo & Co, U.S. District Court, Northern District of California, No. 12-mc-80087. (Reporting By Jonathan Stempel in New York; Editing by Gerald E. McCormick)

Copyright 2010 by Reuters. All rights reserved.

Register for Wall Street & Technology Newsletters
Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.