November 28, 2012 / 11:46 PM / in 5 years

UPDATE 1-Wells Fargo says it won't face SEC action on mortgages

Nov 28 (Reuters) - U.S. securities regulators have dropped an inquiry into Wells Fargo & Co mortgage securities offerings, the bank said in a securities filing on Wednesday.

The staff at the Securities and Exchange Commission notified the bank on Nov. 20 that it closed its investigation and doesn’t plan to recommend an enforcement action, the bank said in the filing.

In February, the No. 4 U.S. bank by assets received a so-called Wells notice from the SEC over disclosures provided in certain mortgage-backed securities offerings. Such notices usually indicate the agency plans to take some kind of enforcement action and gives firms a chance to respond.

The SEC even took Wells to court in March to enforce subpoenas it said the bank had repeatedly ignored. The agency had said in a court filing that it was investigating possible fraud in connection with the bank’s sale of nearly $60 billion in residential mortgage-backed securities to investors.

The SEC and Wells Fargo declined to comment on Wednesday.

The SEC has been slowly churning out cases involving mortgage securities tied to the financial crisis, including entering into $417 million in settlements earlier this month with JPMorgan Chase & Co and Credit Suisse Group AG.

But it has also dropped other cases it initially planned to charge. In August it told Goldman Sachs Group it closed an investigation into the bank’s role in selling $1.3 billion worth of subprime mortgage securities.

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