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

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

WELLS FARGO (WFC)
Mes dernières consult.
Most popular
Report
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

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 CET
   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; [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on WELLS FARGO
10:04a Q&A : Well Fargo's Leigha SmithTriad needs small business growth to spur the eco..
01/19 WELLS FARGO : Free Post Earnings Research Report: Wells Fargo’s Revenue Grew 2.2..
01/19 BB&T : reports gain from corporate tax cut BB&T reports direct $43 million gain ..
01/19 Q&A : Well Fargo's Leigha SmithTriad needs small business growth to spur the eco..
01/19 WELLS FARGO : WFC) Shares Sold by Community Bank N.A.
01/19 Investors Are Banking on Reduced Taxes -- WSJ
01/19 KELLER ROHRBACK L.L.P. : Time is Running Out to Seek Payment from $142 Million W..
01/18 WELLS FARGO : says resolved payment duplication glitch
01/18 Banking on Lower Tax Rates
01/18 WELLS FARGO : Risk-Management Chief to Retire -- WSJ
More news
News from SeekingAlpha
01/19 The Passive/Aggressive Portfolio
01/19 A Rare Window Of Opportunity With U.S. Bancorp
01/18 Building Credibility And Value Still A Work In Progress For Citigroup
01/18 BY THE NUMBERS : Hunting For Undervalued Stocks
01/18 Comerica Delivering The Growth, But Not Cheaply
Financials ($)
Sales 2018 89 340 M
EBIT 2018 34 520 M
Net income 2018 23 498 M
Debt 2018 -
Yield 2018 2,60%
P/E ratio 2018 13,10
P/E ratio 2019 11,71
Capi. / Sales 2018 3,54x
Capi. / Sales 2019 3,43x
Capitalization 316 B
Chart WELLS FARGO
Duration : Period :
Wells Fargo Technical Analysis Chart | WFC | US9497461015 | 4-Traders
Technical analysis trends WELLS FARGO
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 33
Average target price 65,3 $
Spread / Average Target 1,7%
EPS Revisions
Managers
NameTitle
Timothy J. Sloan President, Chief Executive Officer & Director
Elizabeth A. Duke Chairman
John R. Shrewsberry Chief Financial Officer & Senior Executive VP
Scott Dillon Chief Technology Officer
Enrique Hernandez Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
WELLS FARGO5.29%316 468
JP MORGAN CHASE & COMPANY5.66%392 114
INDUSTRIAL AND COMMERCIAL BANK OF CHINA15.00%380 064
BANK OF AMERICA5.62%330 859
CHINA CONSTRUCTION BANK CORPORATION16.93%290 648
BANK OF CHINA LTD9.82%234 443