SAN FRANCISCO (CBS SF) – Wells Fargo & Co. has agreed to pay $590 million to settle a class-action lawsuit filed by investors in Wachovia securities.

The settlement would end a 2008 suit that charges Wachovia misled investors in its bonds and preferred securities by understating losses associated with risky mortgages. Wells bought Wachovia that year.

The San Francisco bank said in a regulatory filing that the deal needs court approval before it can go through.

Investors including several New York City pension funds for teachers, police, firefighters and other employees maintain in the suit that Wachovia repeatedly claimed its mortgage loans were made with high underwriting standards, but that the bank actually lent using risky policies. It also claims Wachovia concealed its mortgage-related losses to prop up its stock price.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments

Leave a Reply

Please log in using one of these methods to post your comment:

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

More From CBS San Francisco

Get The New CBS SF Bay Area Local App
LIVE: Monday through Friday from 3am – 3pm PST

Watch & Listen LIVE