Wells Fargo will pay a Florida county $23.75 million to settle a lawsuit that claimed Wachovia Bank, which Wells Fargo acquired in 2008, mismanaged its securities lending portfolio in 2007-08.
Sarasota County sued in 2010, alleging that Wachovia invested county funds in Lehman Brothers bonds and a complex collateralized debt obligation issued by Altius Funding as part of a securities lending program.
Karen Rushing, clerk of Court and Comptroller of Sarasota County, says Wachovia failed to follow the countys extremely conservative investment guidelines when it invested in Lehman and Altius, which Wells Fargo has denied, according to a county statement.
Wells Fargo has defended itself against a number of securities lending lawsuits in the years since the financial crisis, including a $1.5 million suit by the Trust Fund Committee of the Nebraska Public Power District Employees Retirement Plan; a $30.1 million suit by four Minnesota non-profit organizations; and by nearly a dozen pensions and endowments, mostly in the U.S. Midwest states of Minnesota and Nebraska. The School Employees Retirement System of Ohio sued Wachovia, Wells Fargo and Metropolitan West Securities (a servicing division of Wachovia) over losses it claims resulted from Wachovias mismanagement of its securities lending portfolio.
(CG)