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Wells Fargo Investors Recover $1.4 Billion
By Mike Sachoff
Staff Writer
Article Date: 2010-06-24
California Attorney General Edmund Brown has announced that 3,500 investors, whose holdings in auction rate securities were frozen in the financial crisis of 2008, have recovered $1.4 billion through a settlement with Wells Fargo affiliates.
"We went to bat for people who believed their investments were like cash," Brown said, "but discovered after the financial meltdown that they couldn't get their hands on even a dime of their money for two long years. Now, because of the settlement, they have all of their money back."
The investors, of all sizes, included retirees, working families, small businessmen, and charities. Nearly half are Californians, who received $695 million through buybacks of their securities by Wells Fargo.
Many invested in the securities because of assurances they were "like cash" -- safe and liquid. The securities turned out to be neither. Unable to sell the securities, investors were stuck.
More than 90 percent of the owners of the securities chose to take the Wells Fargo buyback offer under the settlement.
"I'm retired and over 70 years old," said William O'Brien of El Dorado County. "It was frustrating to have that money just sitting there for over two years and being unable to access it when we needed it."
"Getting the investment back has helped save jobs in our company," said Boris Levine, a San Francisco businessman.
Brown said Wells Fargo was co-operative throughout the repayment process and did what it said it would do.
The Attorney General's Office has submitted a request for dismissal of its action against Wells Fargo in San Francisco Superior Court, signaling the successful completion of the repayments.
About the Author:
Mike is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.
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