SEC Charges Wells Fargo for Selling Complex Investments without Disclosing Risks

The SEC charged Wells Fargo's brokerage firm and former vice president for selling investments tied to mortgage-backed securities without fully understanding their complexity or disclosing the risks to investors. According to the Order, Wells Fargo's sales representatives largely relied on the high rating of the securities without understanding their risk. [Lofchie Comment: This is essentially a negligence case, as opposed to one predicated on intentional wrongdoing.]

Cross-Reference(s): Securities Act Sec. 8A, 17(a)(2), 17(a)(3); SEA Sec. 15(b); ICA Sec. 9(b); 466 US 680; Sarbanes-Oxley Act Sec. 308(a).

View in full here; SEC Order (links externally to SEC website).