There were two major settlements of subprime-related cases this week.
(1) Wachovia Corp. (NYSE:WB), a Charlotte-based financial services company now owned by Wells Fargo & Co., has announced the preliminary settlement of the securities class action pending against the company in the S.D. of New York. The case, originally filed in January 2009 in a California state court, stems from allegations that Wachovia and certain of its officers and directors made materially false statements in registration statements and prospectuses regarding the quality of the company’s loan portfolios. The settlement is for $627 million, of which Wachovia will pay $590 million and KMPG, who audited the company’s financial statements, will pay $37 million. Reuters has an article on the settlement.
(2) National City Corp. (NYSE:NCC), a Cleveland-based financial holding company now owned by PNC Financial Services Group Inc., has announced the preliminary settlement of the securities class action pending against the company in the N.D. of Ohio. The case, originally filed in January 2008, stems from allegations that National City and certain of its officers and directors made materially false statements about the company’s mortgage-related exposure. The settlement is for $168 million.
The 10b-5 Daily 