Washington State Department of Financial Institutions

Wells Fargo Agrees To Buy Back Auction Rate Securities From Its Customers

On November 18, 2009, the Washington Department of Financial Institutions (DFI) and the North American Securities Administrators Association (NASAA) announced a settlement in principle with Wells Fargo Investments LLC.

Wells Fargo will buy back about $1.3 billion in auction rate securities, including  those of more than 400 Washington investors.

The settlement was a result of an investigation led by DFI’s Securities Division into Wells Fargo’s practices in connection with its sales of auction rate securities.

The vast majority of the more than 600 investors who purchased an estimated $227 million in auction rate securities through Wells Fargo brokerages were unable access their funds.

"We're pleased this agreement results in reimbursement for Washington consumers," DFI Director Scott Jarvis said. "DFI's Director of Securities Mike Stevenson and his staff are to be commended. The many hours of investigation and their diligent pursuit of this multi-jurisdictional case exemplify their commitment to protecting Washington investors."

The Securities Division entered a Statement of Charges (PDF)* in the matter on November 20, 2008.

The Buy Back

Under the terms of the settlement, the buy back will take place before April 2010.

Customers who sold these securities at a discount after the market failed will be reimbursed.

A special arbitration process will be available for customers with claims as a result of their inability to access their funds.

Investors Can Contact DFI

Investors with questions should contact DFI's Securities Division.

Monday-Friday (8 am - 5 pm PST)
Phone: (360) 902-8760
Toll-Free: 1-877-RING DFI (746-4334)

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