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The Justice Department announced on Dec. 8 that Wachovia Bank N.A., now known as Wells Fargo Bank N.A., will pay $148 million to federal and state agencies after admitting to anticompetitive activity in the municipal bond investments market. According to the settlement, Wachovia admitted that from 1998 to 2004, former employees on its municipal derivatives desk entered into illegal agreements “to manipulate the bidding process and rig bids on certain relevant municipal contracts.” Wachovia stopped competing for municipal contracts in May 2008, according to the agreement. “The illegal conduct at Wachovia Bank corrupted the bidding practices for investment contracts and deprived municipalities of the competitive process to which they were entitled,” Sharis Pozen, acting assistant attorney general in charge of the Department of Justice’s Antitrust Division, said in a written statement. Lead counsel listed for Wachovia, Karen Seymour of Sullivan & Cromwell in New York, was not immediately available for comment. A representative of Wells Fargo also could not immediately be reached. Wells Fargo completed its merger with Wachovia in December 2008. According to a Justice Department news release, the Wachovia settlement followed similar agreements with JPMorgan Chase & Co. and UBS A.G. to resolve allegations of anticompetitive activity in the municipal bond investments market. JPMorgan agreed to pay $228 million in July, while UBS agreed to pay $160 million in May. As part of Wachovia’s agreement, the bank agreed to continue helping the Justice Department investigate anticompetitive activity in the municipal bond industry. “To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Nine of the 18 executives charged have pleaded guilty,” the department noted. Contact Zoe Tillman at [email protected].

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