SEC alleges Wells Fargo ignored MBS subpoenas
The Securities and Exchange Commission seeks to enforce subpoenas it filed against Wells Fargo for alleged failure to produce documents in the SEC's mortgage-backed securities probe.
The SEC filed a subpoena enforcement action in a California federal court against the bank.
The commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities to investors, according to court documents. The SEC said it filed subpoenas with Wells Fargo that date back to September 2011.
"The bank was obligated to produce (and agreed to produce) documents to the commission, but has failed to do so," the SEC said in a statement Friday.
The commission’s action relates to its investigation into whether Wells Fargo made material misrepresentations or omitted material facts in a series of offerings between September 2006 and early 2008.
"The staff in the commission’s San Francisco regional office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank’s underwriting guidelines," the SEC said in a statement. Wells Fargo agreed to produce the documents, and set forth a timetable, yet failed to produce many of the materials, the commission said.
The SEC seeks a court order compelling Wells Fargo to comply with its subpoenas. The commission noted that it is in a fact-finding inquiry and has not concluded that anyone has broken the law.
Wells Fargo could not immediately be reached for comment.
In February, Wells Fargo and Goldman Sachs received Wells notices over mortgage-backed securities disclosures, according to regulatory filings.
Other banks also face potential government probes over whether they misrepresented the quality of loans placed into mortgage-backed securities.
During his State of the Union address in January, President Barack Obama announced the formation of a mortgage fraud task force to look into fraud involving mortgage-backed securities.
The new federal task force, led by New York Attorney General Eric Schneiderman, sent subpoenas to the 11 largest financial institutions in late January.