CHICAGO — Wells Fargo has reached an over $17 million settlement with the state of Illinois to resolve charges the bank failed to reveal the risk of residential mortgage-backed securities (RMBS), according to the Illinois Attorney General's Office.
Wells Fargo has agreed to pay the settlement, which will be distributed to the Teachers Retirement System of the State of Illinois, the State Universities Retirement System of Illinois and the Illinois State Board of Investment for the RMBS sales prior to the 2008 financial crisis, the Attorney General's Office said.
“With this settlement, I have recovered more than a half-billion dollars for Illinois as a result of misconduct by banks and rating agencies in the mortgage-backed securities market,” said Illinois Attorney General Lisa Madigan in a statement. “It has been 10 years since the housing crisis, and I am still taking actions to clean up Wall Street’s greed and misconduct on behalf of the state and Illinois homeowners.”
According to Madigan's office, the Wells Fargo agreement marks the ninth settlement reached by the attorney general related to RMBS sales prior to the financial crisis. Previous settlements include JP Morgan Chase & Company for more than $100 million to the state's pension system and Citigroup's $44 million to the pension system. The Attorney General's Office also reached previous settlements with Bank of America for $300 million, Morgan Stanley for $22.5 million, Goldman Sachs for $25 million and Royal Bank of Scotland for $20 million.