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FINANCIAL CRISIS

After Wells Fargo settlement, a spat over who gets the credit

November 20, 2009|By Walter Hamilton

Reporting from New York — Who deserves credit for forcing Wells Fargo & Co. to buy $1.4 billion in troubled securities from small investors?

California Atty. Gen. Jerry Brown and a group of regulators from other states announced separate settlements Wednesday requiring Wells to repurchase so-called auction-rate securities that had been frozen in the credit crunch since early last year. About half of the money is to go to California residents.

But the attorney general's office and the regulators group got into a spat over who was responsible for the outcome, with each saying it led the way.

Brown's office said it reached a pact with Wells a day before the North American Securities Administrators Assn., known as NASAA, agreed to a nearly identical accord.

"We forged the settlement . . . and they just piggybacked on it," said Brown spokeswoman Christine Gasparac. "I don't want to get into a war with NASAA, but it's our settlement."

Denise Voigt Crawford, head of NASAA and commissioner of the Texas State Securities Board, sees it differently.

"He had nothing to do with our settlement," she said of Brown.

"This is crazy. He's not the securities regulator in California and he wasn't involved in our negotiations. . . . Now he's claiming credit for one of our settlements."

The good news for the affected investors is that they'll get their money back regardless of who's right.

walter.hamilton@latimes.com

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