Wells Fargo Investigated for Failing to Disclose Securities Risks

Reuters is reporting that the federalrngovernment is investigating Wells Fargo & Company for its mortgage-relatedrnpractices including the originating and packaging of home loans by its Wachoviarnunit.  The information comes from thernbank’s third quarter securities filing.</p

According to the bank, it may facernfederal enforcement action related to mortgage-backed securities deals leadingrnup to the financial crisis, specifically whether it properly disclosed thernrisks associated with the securities in documents offering them for sale.    </p

Government investigators are also apparentlyrnlooking at whether Wells Fargo complied with applicable laws, regulations, andrndocumentation required for mortgage originations and securitizations includingrnthose originated at Wachovia which Wells Fargo acquired when it becamernembroiled in financial difficulties at the peak of the 2008 financial crisis.</p

Reuters appears to be implying that itrnis the administration’s Mortgage Fraud Task Force that is investigating WellsrnFargo as it referenced the group’s earlier civil suit against JPMorgan Chase inrnits press release.

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