Washington State Department of Financial Institutions

News Release

Wednesday, November 18, 2009


Lyn Peters, Director of Communications
PH (360) 902-8731 lyn.peters@dfi.wa.gov

Mike Stevenson, Director of Securities
PH (360) 902-8760 mike.stevenson@dfi.wa.gov


Wells Fargo Agrees To Buy Back Auction Rate Securities, Including Those Of More Than 400 Washington Investors

OLYMPIA – The Washington State Department of Financial Institutions (DFI) and the North American Securities Administrators Association (NASAA) today announced a settlement in principle with Wells Fargo Investments LLC.

Wells Fargo will buy back an estimated $1.3 billion in auction rate securities that have been frozen since the auction rate securities markets froze in February 2008.

The settlement is the result of an investigation led by DFI’s Securities Division into Wells Fargo’s practices in connection with its sales of auction rate securities.

"We're pleased this agreement results in reimbursement for Washington consumers," DFI Director Scott Jarvis said. "DFI's Director of Securities Mike Stevenson and his staff are to be commended. The many hours of investigation and their diligent pursuit of this multi-jurisdictional case exemplify their commitment to protecting Washington investors."

While some auction rate securities have been repurchased from investors, the vast majority of the more than 600 investors who purchased an estimated $227 million in auction rate securities through Wells Fargo brokerages and were unable access their funds will benefit from this settlement.

The Securities Division entered a Statement of Charges (PDF)* in the matter on Nov. 20, 2008.

Under the terms of the settlement, Wells Fargo agreed to buy back at par value by approximately April 18, 2010 all auction rate securities purchased through its brokerage unit by investors before February 13, 2008. The settlement agreement also calls for Wells Fargo to:

More details will be posted online as they become available.

For additional information, please read the NASAA press release.

About Division of Securities
www.dfi.wa.gov/sd ▪ 360.902.8760 ▪ 877.RINGDFI (746.4334)
The Division of Securities regulates securities investments, franchises, business opportunities, and off-exchange commodities sold in Washington and the firms and individuals that sell these products or provide investment advice. The Division handles complaints, conducts investigations, and takes appropriate enforcement actions to protect investors and combat fraud.

About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.