Sunday, February 14, 2016

Wells Fargo must pay Catholic hospitals, NJ Transit for bond rip-offs

SEC lists more victims of municipal bond "bid-rigging"

Wells Fargo must pay Catholic hospitals, NJ Transit for bond rip-offs

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The SEC has released the names of more than 50 state and local governments, nonprofits, public utilities and colleges that will share $13.8 million in illegal profits, plus $42.3 million in interest and penalties, that Wells Fargo & Co. bank has agreed to pay to settle accusations of "bid-rigging" in municipal bond sales by former employees of Wells Fargo predecessor Wachovia Corp.

The settlement was announced yesterday - read about it here - but awards in the SEC cases against Wells Fargo were only made public today.

The biggest payments include $11.5 million to Massachusetts for payments wrongly collected in a $2.3 billion bond issue in 2002;  $5.3 million to Jefferson County (Birmingham), Ala., which has been driven to bankruptcy by its large debt load, plus millions in additional payments to other Alabama governments; $3.5 million to Puerto Rico for a $701 million highway bond issue in 2002; $3.3 million to Rhode Island for its 2002 tobacco industry settlement bonds; $1.8 million to Catholic Health Initiatives for 2001 bond issues at hospitals in Kentucky, Colorado and Ohio; $1.4 million for two hospital bond issues totalling $274 million by Guthrie Health in Sayre, Pa.;  $1.1 million to New Jersey Transit for a $224 million bond issue in 2002;  $1 million or more each to the states of New Mexico and Tennessee and the City of Richmond, Va.; and smaller sums to Jersey City, Allentown, Economy (Beaver County), and the Mars School District in Pennsylvania, among others.

Wells Fargo has blamed people who no longer work for the bank, some of whom have been subject to criminal charges by federal prosecutors.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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