Updated from 3/23/12 with comment from Wells Fargo about Securities and Exchange Commission action in fourth paragraph
NEW YORK ( TheStreet) -- Wells Fargo (WFC - Get Report) was the subject of a "subpoena enforcement action," for failing to produce documents related to a mortgage backed securities investigation, the Securities and Exchange Commission announced Friday.
The regulator is investigating possible fraud in connection with Wells Fargo's sale of nearly $60 billion in residential mortgage-backed securities to investors, according to the SEC's announcement. The regulator clarified in its statement that "it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law."
According to the SEC, Wells Fargo "was obligated to produce (and agreed to produce) documents to the Commission, but has failed to do so. Accordingly, the Commission filed its Application for an Order Requiring Compliance with Administrative Subpoenas."It doesn't appear there is any penalty in connection with Wells Fargo's failure to produce the documents at this point. An SEC spokesman declined to comment. "Wells Fargo believes the subpoena enforcement action is inappropriate and unwarranted and will vigorously defend itself in court," the bank said in a statement. Wells Fargo noted in its annual 10-K earnings report that "government agencies continue investigations or examinations of other mortgage related practices of Wells Fargo, including "whether Wells Fargo may have violated fair lending or other laws and regulations relating to mortgage origination practices" and "whether Wells Fargo properly disclosed in offering documents for its residential mortgage-backed securities the facts and risks associated with those securities." Wells Fargo also disclosed it "has received a Wells notice from SEC staff relating to Wells Fargo's disclosures in mortgage-backed securities offering documents." The bank stated at the time that "Wells Fargo continues to provide information requested by the various agencies in connection with certain investigations." -- Written by Dan Freed in New York. Follow me on Twitter