Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Wells Fargo & Co    WFC

Delayed Quote. Delayed  - 09/26 10:00:32 pm
44.88 USD   -1.88%
04:50a WELLS FARGO : Sued By Shareholders Over Cross-Selling Scandal
03:35aDJWELLS FARGO : Labor Department Starts Review of Wells Fargo Labor Pr..
02:12a ROBBINS GELLER : Files Class Action Suit Against Wells Fargo & Comp..
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

Wells Fargo & Company : Panel Rules Wachovia Securities Must Pay $852,000 To Ex-Congressman

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/23/2012 | 11:24pm CEST
   By Caitlin Nish 
   Of  
 

An arbitration panel has ruled that Wachovia Securities Inc. must pay an ex-congressman from Florida $852,000 for damages related to an alleged Ponzi scheme.

The award represents a fraction of what former U.S. Rep. Alan Grayson had sought: up to $77 million in compensatory damages stemming from "stock loan" agreements he had participated in with Derivium Capital LLC and Derivium Capital (USA) Inc. Derivium's business collapsed in 2005, leaving participants in its loan program with hundreds of millions of dollars in combined losses.

Grayson alleged that Wachovia, which was acquired by Wells Fargo & Co. (WFC) in 2008, aided and abetted in a breach of fiduciary duty related to Grayson's involvement in the loans, according to documents from the Financial Industry Regulatory Authority arbitration panel.

While arbitration proceedings can often take more than a year to resolve, this case was unusually protracted, spanning five years and 44 separate hearing days.

Grayson and his AMG Trust alleged that Wachovia facilitated the scheme by engaging in brokerage and trading activity "when it knew, or should have known, that Derivium was a 'Ponzi' scheme," Florida-based Morgan & Morgan, the law firm which represented Grayson, said in a statement Monday.

A spokesman for Wells Fargo declined to immediately comment.

Tucker H. Byrd, Grayson's attorney, told Dow Jones Newswires that Derivium's stock loan program was designed for investors to borrow against stock without incurring a tax liability by promising to lend investors 90% of the value of shares transferred as collateral. At the end of three years, the investor had the option to repay the loan and interest and receive the stock back, surrender the stock to Derivium if it hadn't appreciated more than the interest accrued or have Derivium sell the stock and pay the investor any proceeds above the value of the loan, Byrd said.

Instead, Byrd alleged, the stock was immediately sold and Derivium made loans back to the borrowers with the proceeds of the sale of their own collateral.

Since Wachovia maintained accounts for both Grayson and Derivium, "we alleged Wachovia knew the transactions were different than as represented to the investing public and they knew it from day one," Byrd said.

Grayson, a Democrat who represented Florida's eighth congressional district between 2009 and 2011, originally filed his claim against Wachovia in 2007, alleging fraud, civil conspiracy and unfair trade practices, among other claims. At the close of the hearing he requested compensatory damages ranging from $27.9 million to $77.2 million, depending on the damage calculation model utilized, as well as interest and attorneys' fees, according to the arbitration documents.

The panel found Wachovia liable only on Grayson's claim of aiding and abetting breach of fiduciary duty, ruling it must pay $852,000, inclusive of pre-judgment interest.

As is customary, the panel didn't explain the reasoning for its decision, which was dated April 2.

A South Carolina federal jury in 2009 awarded at least $150 million to plaintiffs, including $34 million for Grayson, in a lawsuit over the stock loan program, according to local media reports. Grayson, a lawyer and the first president of telecommunications company IDT Corp. (IDT), announced last summer that he is planning another run for Congress this year.

-By Caitlin Nish, Dow Jones Newswires; 212-416-2076; caitlin.nish@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on WELLS FARGO & CO
04:50a WELLS FARGO : Sued By Shareholders Over Cross-Selling Scandal
03:35aDJWELLS FARGO : Labor Department Starts Review of Wells Fargo Labor Practices
02:12a ROBBINS GELLER RUDMAN & DOWD LLP : Files Class Action Suit Against Wells Fargo &..
09/26DJWELLS FARGO : Labor Department Starts Review of Wells Fargo Labor Practices
09/26 Fed seeks more capital from big banks, relief for regional lenders
09/26 WELLS FARGO : Senior Executives Demonstrating Healthy Behaviors Is More Impactfu..
09/26 WELLS FARGO : Manufacturers Life Insurance Company The buys $565,528,859 stake i..
09/25 WELLS FARGO WORKERS : Sales Focus Relentless
09/25 WELLS FARGO : Pressures mount on Wells Fargo following fake-accounts scandal
09/24DJWELLS FARGO : Taps Adviser on Pay -- WSJ
More news
Sector news : Banks - NEC
04:11aDJCHINA CONSTRUCTION BANK : Hong Kong Branch Plans 3-Year USD Bonds Offering -- Do..
09/26 Fed seeks more capital from big banks, relief for regional lenders
09/26DJBANK OF AMERICA : Merrill Lynch to Pay $12.5 Million Fine for Mini-Flash Crashes..
09/26DJDEUTSCHE BANK : Shares Drop on Fears of Capital Raising -- 4th Update
09/26DJBOND REPORT : Treasury Yields End At Nearly 3-week Low Ahead Of Presidential Deb..
More sector news : Banks - NEC
News from SeekingAlpha
09/26 BUFFETT : Mum's The Word With Wells Fargo
09/26 Bank Of America Remains Cheap - A Historic Look At Big Banks
09/26 General Electric's Imagination Really Is At Work
09/26 Oh Stumpf... The Trouble For Wells Is Just Beginning
09/26 Warren Buffett Will Not Divest Wells Fargo
Advertisement
Financials ($)
Sales 2016 88 728 M
EBIT 2016 35 520 M
Net income 2016 20 498 M
Debt 2016 -
Yield 2016 3,34%
P/E ratio 2016 11,40
P/E ratio 2017 10,91
Capi. / Sales 2016 2,60x
Capi. / Sales 2017 2,52x
Capitalization 230 783 M
More Financials
Chart WELLS FARGO & CO
Duration : Period :
Wells Fargo & Co Technical Analysis Chart | WFC | US9497461015 | 4-Traders
Full-screen chart
Technical analysis trends WELLS FARGO & CO
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 32
Average target price 51,2 $
Spread / Average Target 12%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
John G. Stumpf Chairman & Chief Executive Officer
Timothy J. Sloan President & Chief Operating Officer
John R. Shrewsberry Chief Financial Officer & Senior Executive VP
Scott Dillon Chief Technology Officer
Enrique Hernandez Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
WELLS FARGO & CO-17.44%230 783
JPMORGAN CHASE & CO.-0.38%242 906
INDUSTRIAL AND COML BA..-3.06%234 074
CHINA CONSTRUCTION BAN..-9.52%191 203
BANK OF AMERICA CORP-10.34%158 378
BANK OF CHINA LIMITED-15.21%151 488
More Results