On February 6th, 2013, after a one day hearing before a FINRA panel, Wachovia was ordered to repurchase 1,931 shares of Fannie Mae Preferred Series S "FNMA PFD Series S". Wells Fargo Advisors later took over Wachovia, so the case was brought against Wachovia's successor entity, Wells Fargo Advisors. The claim was brought by two elderly Florida investors who were told that the FNMA PFD Series S were government backed and insured.
The award specifically found Wachovia liable on claims of negligence, negligent supervision, fraud and breach of contract. A full award of rescission was entered against Wachovia. The FINRA arbitrator, that decided the case, wrote an opinion that further stated, "Wachovia's liability was predicated on the manner in which it marketed Fannie Me preferred stock to Claimant (customer)."
During the hearing, a significant amount of evidence was introduced which highlighted Wachovia's knowledge of the severe credit risks and problems with Fannie Mae, both before and after the sale to the Claimants, none of which was adequately disclosed.
All forum fees were assessed to the Respondent Wachovia. Lars Soreide, Esq., of Soreide Law Group has successfully tried other Fannie Mae preferred cases resulting in victories against Wells Fargo that resulted in substantial recoveries for the investors.
If you purchased Fannie Mae or Freddie Mac preferred securities from any broker dealer in 2008 call (888) 760-6552 to speak with Securities Lawyer, Lars Soreide, Esq., regarding your legal rights.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.