Wells Fargo & Co. and regulators announced Thursday a $148 million settlement to resolve accusations that Wachovia, which was purchased by Wells, participated in a bid-rigging scheme that hurt state and local governments.
It's the fourth major bank to settle with the consortium of federal agencies and state attorneys general. Bank of America Corp. settled for $137 million last December.
The settlement is also the second Wells Fargo has made on the issue in as many months.
"We're really pleased to resolve the issue," Wells Fargo spokeswoman Dana Obrist said, noting that it involved activity that predated the company's 2008 acquisition of Wachovia.
In a statement, the bank said it "cooperated fully" with the investigation and does not condone illegal activity.
The federal agencies alleged that a group of large banks conspired to defraud local governments and other entities that bought municipal derivatives, which are used to invest money from bond proceeds until they are needed for projects. Bankers coordinated what they would bid on the contracts and in some cases paid kick-backs to one another, investigators said.
A total of $54.5 million will go to towns, school districts and nonprofits around the country as part of the settlement with 26 state attorneys general.
"Rigging the system to prevent fair competition cost taxpayers, local governments and schools millions of dollars," North Carolina Attorney General Roy Cooper said in a statement. "I'm pleased that we've been able to win money back for those who were harmed here in North Carolina."
Granted, if you're a local government on the brink and have laid off thousands of employees, this money comes at a damn good time and it will make a difference. On the other hand, there's no way Well Fargo should still be in business after all the nonsense it has engaged in, and they're basically getting a pass while continuing to rake in money from the government.
It's a victory for this battle. The war was lost long ago.
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