Wells Fargo...[was], at a minimum, negligent in recommending the relevant asset-backed commercial paper programs without obtaining adequate information about them to form a reasonable basis for recommending these products and without disclosing the material risks of these products. As a result, Wells Fargo...violated Sections 17(a)(2) and 17(a)(3) of the Securities Act.

Wells Fargo [JURIST news archive] has been involved in many legal battles recently. Last month, the US Court of Appeals for the Ninth Circuit [official website] dismissed a lawsuit against several banks, including Wells Fargo, that accused the banks of price-fixing [JURIST report]. In March, the SEC filed a subpoena enforcement action [JURIST report] against Wells Fargo to force the company to hand over documents connected to the company's sale of nearly $60 billion in residential mortgage-backed securities to investors. Earlier in March, Wells Fargo and the country's four other largest mortgage service providers reached a $25 billion settlement [JURIST report] with the Department of Justice, the Department of Housing and Urban Development [official websites] and 49 state attorneys general over mortgage loan servicing and foreclosure abuses. The settlement was initially announced [JURIST report] in February. The settlement does not prevent civil suits by individual homeowners or criminal charges pursued by federal or state authorities.