Wachovia Bank Gets SEC, DOJ Subpoenas In Municipal Bond Probe

Feb.28, 2008 in Market Outlook

Last Update: 2/28/2008 9:00:46 AM

DOW JONES NEWSWIRES

Wachovia Corp. (WB) disclosed Thursday that its Wachovia Bank received subpoenas
from the Justice Department and the Securities and Exchange Commission for
documents in connection with an investigation into the bidding of financial
instruments in the municipal bond market.

In its annual report with the SEC, the financial services firm said the Justice
Department and the SEC told the bank that they believe some of its employees
engaged in “improper conduct” with regard to the bidding.

The company said that last November, the Department of Justice notified two
unidentified bank employees, both of whom are on administrative leave, that they
were the targets of the agency’s investigation.

According to the filing, Wachovia Bank continues to fully cooperate with the
government investigations.

Some U.S. government agencies have been conducting, since at least 2006, a
wide-ranging investigation of bid-rigging and other alleged abuses in the
municipal-bond market.

In November 2006, several firms, including UBS AG (UBS), received subpoenas from
Justice and the SEC related to derivative deals with municipal bond issuers, as
well as investment of proceeds of municipal-bond issuances.

Also that month, companies including American International Group (AIG), Genworth
Financial Inc. (GNW), Financial Security Assurance Holdings Ltd. and XL Capital
Ltd. (XL) said that they or their subsidiaries had received subpoenas from one or
the other of the agencies in connection with the bond-market investigation.

-Bhattiprolu Murti, Dow Jones Newswires; 202-862-1357

(END) Dow Jones Newswires

February 28, 2008 09:00 ET (14:00 GMT)

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