Defendant Name:
Wachovia Securities, LLC
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
Wells Fargo & Co.
SIC Code:
6021
CUSIP:
94974610
Document Reference:
comp20885
Document Details
Legal Case Name
SEC v. Wachovia Securities, LLC
Document Name
Complaint
Document Date
05-Feb-2009
Document Format
Civil Proceeding
Case Number
09-cv-00743
Federal District Court
Illinois, Northern District of Illinois
Federal District Judge
Virginia M. Kendall
Allegation Type
Broker Dealer
Document Summary
In its Complaint, the SEC stated that: "Wachovia misled its customers about the fundamental nature and increasing risks associated with auction rate securities ('ARS') that it underwrote, marketed and sold. Wachovia and A.G. Edwards & Sons, Inc. ('A.G. Edwards'), whose broker-dealer operations were consolidated into Wachovia, misrepresented to its customers that ARS were safe, highly liquid investments comparable to cash or money market instruments. As a result, numerous customers purchased ARS using funds that they needed to remain available on a short-term basis." In particular, the SEC alleged that: "In late 2007 and early 2008, Wachovia became aware of mounting evidence that the firm and its customers could no longer rely on the historical stability of the ARS market. Investor concerns about the creditworthiness of monoline insurance companies (who insured certain ARS), higher than normal ARS inventory levels at A.G. Edwards, and auction failures in certain segments of the ARS market indicated that the risk of auction failures had materially increased. Wachovia's FAs, nevertheless, continued to market ARS to its customers as highly liquid investments."
