Wells Fargo has reached a multi-state settlement over allegations that individuals working at Wachovia, which it acquired in 2008, engaged in anti-competitive practices in the muni-bond derivative markets, Colorado Attorney General John Suthers announced today.
The $58.75 million settlement is part of a larger $148 million coordinated settlement among banks, state attorney generals, the U.S. Department of Justice, the Securities and Exchange Commission, the Internal Revenue Service and the Office of the Comptroller of the Currency.
Settlement funds will go to reimburse governments and nonprofit organizations harmed by the alleged anti-competitive conduct, including bid rigging, agreements to refrain from bidding, and fraud.
The practices resulted in lower yields, lower rates of return, or less favorable terms for governments and not-for-profit organizations.
The number of injured parties in Colorado and their share of settlement funds will be determined in coming months, Suthers said in a release.
The alleged violations occurred before Wells Fargo acquired Wachovia. Wells Fargo also agreed to pay a $1.25 million civil penalty and $3 million to reimburse the states for fees and costs incurred during the investigation.
