A subsidiary of Wachovia Corp. is being investigated over payments it received from mutual fund companies, and another may soon be charged with conflicts of interest involving stock research and investment banking, Reuters reports.
Wachovia Securities LLC, the retail brokerage of Wachovia, may not have properly disclosed revenue-sharing agreements with fund companies, according to the company. In addition, the Securities and Exchange Commission is looking into the firms sales and distribution practices.
The other subsidiary, broker/dealer arm Wachovia Capital Markets LLC, is negotiating with the SEC about how to resolve its possible research/investment banking conflicts of interest. The probe, according to Reuters, may wind up ending with charges of state securities violations.
Back in February, Wachovia Securities was part of a group fined $21.5 million for not providing discounts for high-end mutual fund customers. A spokesman for Wachovia told Reuters the company is "cooperating fully" with the SECs investigation.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.