Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

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

Delayed Quote. Delayed  - 07/22 10:00:16 pm
48.32 USD   +0.04%
07/21 WELLS FARGO : and Amazon Team Together for New Student Offering
07/21DJAMAZON : Tip-Toes Into Banking Business
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
04/23/2012 | 11:24pm CEST
   By Caitlin Nish 

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
Latest news on WELLS FARGO & CO
07/21 WELLS FARGO : Carrie Tolstedt to Retire at Year's End; Mary Mack to Succeed Her ..
07/21 WELLS FARGO : Erickson Living Announces Expansion of Leadership Team With New Ex..
07/21 WELLS FARGO : and Amazon Team Together for New Student Offering
07/21DJAMAZON : Tip-Toes Into Banking Business
07/20 WELLS FARGO : CORRECTING and REPLACING Wells Fargo and NCR Collaborate to Drive ..
07/20 WELLS FARGO : Opens first retail banking store in denville
07/20 WEIS MARKETS : Wells Fargo to move downtown Pottsville branch
07/19 WELLS FARGO/GALLUP SURVEY : Investors Curious About Digital Investing, More Opti..
07/18 WELLS FARGO : Middle Market Commercial Banking Expands Chicago Suburban Reach wi..
More news
Sector news : Banks - NEC
01:35pDJLVMH Sells Donna Karan to G-III for $650 Million
01:05pDJEurope Stocks Up Ahead of Central Bank Moves
12:45pDJOil Down on Bearish Outlook
10:40aDJLONDON MARKETS : FTSE 100 Clings To Thin Gain As Banks Drift Lower
08:49aDJSummer Offers Refiners No Relief -- WSJ
More sector news : Banks - NEC
News from SeekingAlpha
06:32a BANK OF AMERICA : An Intriguing Investment Opportunity
07/24 As Long As The Music Is Playing, Should You Keep Dancing?
07/23 Quarter 2 Earnings Heading In The Wrong Direction! Week One Review
07/22 6 MONTH PORTFOLIO UPDATE : Good News, Double-Digit Increase In Both Income And V..
07/22 Verizon-Yahoo A Done Deal? Nintendo's Plunge, Amazon Student Loans - Eye On T..
Financials ($)
Sales 2016 88 794 M
EBIT 2016 33 981 M
Net income 2016 20 617 M
Debt 2016 -
Yield 2016 3,16%
P/E ratio 2016 12,02
P/E ratio 2017 11,44
Capi. / Sales 2016 2,76x
Capi. / Sales 2017 2,68x
Capitalization 245 323 M
More Financials
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
Technical analysis
Income Statement Evolution
More Financials
Mean consensus OUTPERFORM
Number of Analysts 34
Average target price 52,9 $
Spread / Average Target 9,5%
Consensus details
EPS Revisions
More Estimates Revisions
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-11.11%245 323
JPMORGAN CHASE & CO.-3.01%234 172
BANK OF AMERICA CORP-14.56%147 710
More Results