Wells Fargo (WFC) to Pay $11.2M to Settle CDO Regulatory Claims

Wells Fargo & Co. (NYSE: WFC) agreed to pay $11.2 million to settle regulatory claims related to its Wachovia Capital Markets unit selling two CDOs tied to home mortgages.

The unit charged "undisclosed excessive markups" while selling stakes in a CDO to the Zuni Indian tribe and an individual investor, according to a statement from the U.S. Securities and Exchange Commission on Tuesday.

"Wachovia caused significant losses to the Zuni Indians and other investors by violating basic investor-protection rules -- don’t charge secret excessive markups, and don’t use stale prices," SEC Enforcement Director Robert Khuzami said.

Wells Fargo did not admit or deny any wrongdoing in the matter in order to settle the claims. The violations occurred in 2006 and 2007.

Shares of Wells Fargo are up 16 cents to $32.03 in mid-day trade Tuesday.

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