SEC Says Wachovia Applied Excessive Markups To CDOs
According to an article in the Wall Street Journal, Wachovia is set to be the target of civil charges to be filed by the Securities and Exchange Commission (SEC) for allegedly overpricing collateralized debt obligations (CDO). The CDO, CMO, MBS and various other acronyms distinguishing the plethora of complex investment vehicles in which pools of mortgages were packaged together and sold to investors during the housing bubble. The SEC apparently believes that the North Carolina bank, now owned by Wells Fargo, applied excessive markups that failed to reflect the diminishing value of the loans underlying its CDO.
Wachovia is only a part of a much broader SEC probe into the marketing and sale of $1 trillion worth of CDO. Nearly every bank that dealt in the CDO business has been subpoenaed including Citigroup, JP Morgan and Morgan Stanley, with the possibility of others on the horizon. Since the mortgage meltdown, the SEC settled a CDO case against Goldman Sachs for $550 million and has another pending against an undisclosed firm.
If you have suffered losses in CDO, CMO, MBS or other complex structured products, please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.