The Colorado Division of Securities has agreed to an auction rate securities settlement with Wells Fargo Investments.
Under terms of the consent order, Wells Fargo Investments agreed to offer to buy back $34.6 million worth of auction rate securities from Colorado investors. Some investors who purchased the securities through Wells Fargo Investments were unable to sell back the securities in February of 2008, after they were frozen in the auction rate securities market.
Allegations that some of Wells Fargo Investments’ agents recommended auction rate securities as liquid, short-term investments led to an investigation, which has been concluded with this consent order.
Many states’ securities regulators received complaints from investors who suffered significant financial damage because the money they’d been told was liquid was actually tied up in the ARS market.
This is the 11th consent order that Securities Commissioner Fred Joseph has finalized.
Previous consent orders include Deutsche Bank Securities, Citigroup Global Markets, Bank of America Securities, Credit Suisse Securities, JP Morgan Chase, Merrill Lynch, RBC Capital Markets, Wachovia Securities, TD Ameritrade, UBS Securities LLC and UBS Financial Services, Inc.
This investigation was part of a larger state-led effort to address problems in connection with the offer and sale of auction rate securities.