SEC readies civil charges against Wachovia: report

(Reuters) – The U.S. securities regulator is preparing to bring civil charges against Wachovia Corp, a unit of Wells Fargo & Co, for allegedly overpricing mortgage bond deals, the Wall Street Journal said, citing people familiar with the matter.

The Securities and Exchange Commission (SEC) has focused on the money Wachovia charged investors for collateralized debt obligations (CDOs), a type of security created by packaging mortgages, the Journal said, citing people familiar with the matter.

SEC officials believe the bank applied excessive markups that did not reflect the diminishing value of the underlying loans, the WSJ said.

Wells Fargo, which purchased Wachovia for $19.36 billion in 2008, and an SEC spokesman declined to comment to the Journal.

Both could not immediately be reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)

SEC readies civil charges against Wachovia: report