Not So Fast, Wells Fargo
Matt is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
"Easy come, easy go" could describe the legal luck of Wells Fargo ) over the past few days. As Fool Eric Volkman highlighted earlier this week, Wells managed to dodge a bullet when the SEC dropped a case it was pursuing around mortgage backed securities. Eric noted:
a few hundred million in fines for crisis-era misconduct from the SEC ... wouldn't have deepened Wells' hole very much. What it likely would have done more effectively is kept the gates wide open for further government penalties and lawsuits. Come on in, help yourself!
But as Bloomberg reported yesterday, the bank is having less luck when it comes to wriggling away from another case brought by the Justice department. Wells was hoping that it could get the case dismissed because the bank had already made reparations for its misdeeds through the giant $25 billion foreclosure settlement agreed to earlier this year. But the DOJ had other thoughts.
The settlement “only bars the government from asserting a very specific type of claim, i.e., where its ’sole basis’ is Wells Fargo’s submission of a false annual certification in connection with maintaining its status as an FHA-approved Direct Endorsement Lender,” John Warshawsky, a Justice Department lawyer, said in the filing.
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