Wells Fargo Must Answer for Wachovia’s Alleged Fraud

CN) — Wells Fargo must face fraud claims over $163 million in securities that Wachovia, now owned by Wells Fargo, allegedly used as a “dumping ground” for assets it wanted off its books, a federal judge ruled.
A number of specialized investment entities sued Wells Fargo in New York after three collateralized debt obligations marketed by Wachovia Capital Markets defaulted following the 2008 financial crisis.
These entities, led by Loreley Financing No. 3, invested a total of $163 million in the CDOs, which they now claim were used as a “private dumping ground for rapidly deteriorating assets” that Wachovia wanted to get rid of.
Wells Fargo is the successor in interest to Wachovia, having purchased the bank in 2008 in an FDIC-brokered deal following Wachovia’s heavy losses in the subprime mortgage crisis.
The Second Circuit upheld the plaintiffs’ primary fraud claim last year, and Wells Fargo did not attempt to dismiss that count again on remand.
However, Wells Fargo sought to dismiss the complaint’s claims for rescission, aiding and abetting fraud, and conspiracy to commit fraud.
U.S. District Judge Richard Sullivan granted the motion on the conspiracy claim, but upheld plaintiffs’ other causes of action Thursday.

Read on.

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2 responses to “Wells Fargo Must Answer for Wachovia’s Alleged Fraud

  1. Reblogged this on Deadly Clear and commented:
    Maybe Uncle Richard should have waited to decide the conspiracy claim since Wells Fargo is in the process of exposing itself. Whaddah ya think? Sydney

  2. How ab wells Fargo defaulting fannie mae loans when borrower refused to pay extortion payment except fannie mae employees in on it FHFA employees cover it up

    Sent from my U.S. Cellular® Smartphone

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