Attorney general sues Wells Fargo for defrauding investors

California Attorney General Jerry Brown today sued three subsidiaries of Wells Fargo Bank for allegedly defrauding California investors. KPCC’s Julie Small reports.

California Attorney General Jerry Brown today sued three subsidiaries of Wells Fargo Bank for allegedly defrauding California investors. KPCC’s Julie Small reports.

Julie Small: Brown says the subsidiaries encouraged investors to buy “auction rate securities” that pay a higher interest rate than most savings accounts.

Attorney General Jerry Brown: These instruments were sold to people under the idea that it’s just like cash and you get your money back in eight days. That turned out not to be true.

Small: The market for auction rate securities froze a year ago. No one could cash out – and the attorney general’s phone started ringing.

Brown: We got a lot of complaints. We know there’s over 2,000 people that bought these securities. They’re mad as hell and want their money back. And we believe under the laws of California, they have that right, and we’re going to court to make sure that right is vindicated.

Small: Brown wants Wells Fargo to return a billion-and-a-half dollars to investors. Wells Fargo says it’s not responsible for the “extraordinary circumstances” that collapsed the auction rate securities market.

blog comments powered by Disqus