Wachovia faces possible SEC action
SEC may take civil action against the bank's brokerage unit on improper mutual fund trading charges.
September 28, 2004: 1:39 PM EDT
NEW YORK (Reuters) - Wachovia Corp., the nation's fifth-largest bank, said the U.S. Securities and Exchange Commission may take civil enforcement action against its Wachovia Securities brokerage unit over possible improper mutual fund trading.
The case concerns an arrangement involving a former Evergreen Investment Management Co. employee and a broker who made excessive trades on behalf of a client in Evergreen's Mid Cap Growth fund between December 2000 and April 2003.
Wachovia disclosed the matter in a securities filing Monday. The SEC told Wachovia on July 28 that it may recommend enforcement action against Evergreen, the bank's mutual fund unit, and over Evergreen entities in the same case.
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Wachovia Securities and Evergreen each received a "Wells notice" from the SEC, which indicates the agency intends to accuse the recipient of wrongdoing, and gives the recipient a chance to respond. Wachovia said it plans to make a submission explaining why enforcement action should not be instituted.
Last month, Wachovia also said the SEC was investigating possible improper short-term trading between September 2001 and January 2003 by a manager of Evergreen's Precious Metals fund. That fund's lead manager during that period, Prescott Crocker, retired from Evergreen in February.
Wachovia is based in Charlotte, North Carolina.
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