San Francisco-based Wells Fargo & Co. agreed Wednesday to repay $1.4 billion to investors to settle allegations that the bank cheated investors by selling ‘auction-rate securities’ as safe.
Wells Fargo & Co. said that it would buy back all types of no liquid auction-rate securities from thousands of retail customers, charities and small businesses across the country by February next year.
Company’s recent move will resolve a lawsuit filed by the state Attorney General Jerry Brown as well as a separate investigation by securities regulators.
Speaking on the issue, Jerry Brown said, “Based on misleading advice, investors bought these risky securities. Now, retail investors and small businesses are finally getting their money back.”
As a part of the settlement, Wells Fargo will also pay $1.9 million fine. However, the company has not admitted any wrongdoing.
Wells Fargo said all the eligible investors would be informed about the buyback offer by mail within 90 days.