An investment management firm now owned by Wells Fargo (WFC) has agreed to pay $25 million to settle claims that it misled investors about the makeup of a mutual fund it once marketed.

Evergreen Investment Management Company, which Wells inherited when it acquired Wachovia in 2009, was sued by institutional investors in 2010 for allegedly marketing its Evergreen Ultra Short Opportunities Fund as an ultra-short bond fund when it actually was invested in risky and illiquid mortgage-backed securities. Evergreen liquidated the fund in mid-2008 after the fund's value had declined by more than 40% in a 10-month span.

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