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U.S.: $46M fine for Wachovia in municipal bond bid-rigging

By  |  November 5, 2012
U.S.: $46M fine for Wachovia in municipal bond bid-rigging

Wachovia Bank N.A. has been formally charged by the U.S. Securities and Exchange Commission for allegedly rigging 58 municipal bond reinvestment transactions to earn fraudulent profits in the reinvestment of the bond proceeds. According to the SEC, the bid-rigging occurred over eight years and in 25 states, as well as Puerto Rico. Wachovia allegedly earned millions of dollars through a practice called “last looks,” which involves the acquisition of information straight from bidding agents about completing bids, as well as “set-ups,” which involves bidding agents obtaining non-winning bids from others to favor the playing-field for Wachovia. Wachovia will settle with a $46 million fine, which will be returned to municipalities or conduit borrowers involved.

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