The legal hits — via fines — keep on coming for Wells Fargo.
As reported by Courthouse News Service, the financial giant has been ordered to face claims of as much as $163 million tied to allegations of fraud that Wachovia used certain securities as a “dumping ground” for assets the bank no longer wanted to hold.
The site noted that several investment entities have sued Wells in New York, based on three collateralized debt obligations that defaulted in the wake of the financial crisis. That debt had been sold by Wachovia’s capital markets division. The investors, which the site said had been led by Loreley Financing No. 3, had put up $163 million in the debt and also charged that the firm had abetted fraud. The motion to proceed was granted last week in the U.S. District Court. The judge did dismiss the allegation that there had been a conspiracy to commit fraud.
As has been widely noted, the latest legal salvo comes as the company battles the aftershocks of sham accounts set up to churn business and Wells being fined $185 million for those practices.
