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{{Infobox Company
| name = Wachovia
| logo = [[Image:Wachovia logo.svg|200px|Wachovia logo]]
| type = [[Subsidiary]]
| genre = [[Financial Services]]
| foundation = 1908
| founder =
| location_city = [[Charlotte, North Carolina]]
| location_country = [[United States]]
| locations =
| area_served =
| key_people =
| industry =
| products =
| services =
| revenue =
| operating_income =
| net_income =
| assets =
| equity =
| owner =
| num_employees = 121,890<ref name="employees">{{cite web |title=Wachovia dealt to Citigroup after 129 years as independent |publisher=Winston-Salem Journal |date=2008-09-30 |url=http://www2.journalnow.com/content/2008/sep/30/wachovia-dealt-to-citigroup-after-129-years-as-ind/ }}</ref>
| parent = [[Wells Fargo]]
| divisions =
| subsid =
| slogan =
| homepage = [http://www.wachovia.com/ www.wachovia.com]
| footnotes =
| intl =
}}

[[Image:Wachoviahq.jpg|thumb|185px|right|[[One Wachovia Center]] headquarters in [[Charlotte, North Carolina]].]]
[[Image:2008-11-01 Wachovia Bank Northgate Financial Center.jpg|thumb|237px|right|A typical Wachovia Bank branch in [[Durham, North Carolina]].]]

'''Wachovia''', based in [[Charlotte, North Carolina]], is <!--Do not change this to "was" until the Wachovia brand is absorbed. Thanks! --> a diversified, wholly owned [[financial services]] subsidiary of [[Wells Fargo]]. As an independent company, it was the fourth-largest [[bank holding company]] in the [[United States]] based on total assets. Wachovia is the name under which Wachovia Bank, N.A. and Wachovia Bank of Delaware, N.A. do business.

Wachovia Corporation was purchased by Wells Fargo on December 31, 2008, and it ceased to be an independent corporation on that date. Over the next three years, the Wachovia brand will be absorbed into the Wells Fargo brand. <ref name="WFC">{{cite web |title=Wells Fargo Completes Wachovia Purchase |publisher=Wells Fargo |date=2008-12-31 |url=http://studio-5.financialcontent.com/mi?Account=charlotte&GUID=7565492&Page=MediaViewer&Ticker=WFC |accessdate=2009-01-01 }}</ref> Wachovia Corporation's stock was traded on the [[New York Stock Exchange]] (NYSE) under the [[ticker]] WB.

==Business Lines==
Wachovia provides a broad range of banking, [[asset management]], [[wealth management]], and corporate and [[investment banking]] products and services. It is one of the largest providers of financial services in the United States, operating financial centers in 21 states and Washington, D.C., with locations from Connecticut to Florida and west to California.<ref name="facts">{{cite web |title=Wachovia Company Facts |publisher=Wachovia |date=2007-04-16 |url=http://www.wachovia.com/inside/page/0,,132_148,00.html |accessdate=2007-06-14 }}</ref> Wachovia provides global services through more than 40 offices around the world.

It served retail brokerage clients under the name [[Wells Fargo Advisors|Wachovia Securities]] nationwide as well as in six [[Latin America]]n countries, and investment banking clients in selected industries nationwide. In 2009, Wachovia Securities was the first Wachovia business to be converted to the Wells Fargo brand, when the business became Wells Fargo Advisors. Wachovia also operates Calibre, its wealth management services to ultra-high net worth families with net worth exceeding $25 million.<ref name="Calibre">{{cite web |title=Calibre Wealth Management |publisher=Wachovia |date=2009-01-01 |url=https://www.calibre.com/foundation/v/index.jsp?vgnextoid=1f0a354e20007110VgnVCM1000003f0c1872RCRD&vgnextfmt=default |accessdate=2009-01-01 }}</ref>

==Corporate history==
Wachovia Corporation was originally created by the [[Mergers and acquisitions|merger]] of the legacy Wachovia Corporation and First Union Corporation. First Union was considered the acquiror in the transaction with Wachovia, although the transaction was structured as a tax-free [[union of equals]] and the combined entity chose to retain the Wachovia name.

===Origin of corporate name===
{{main|Wachovia, North Carolina}}
'''Wachovia''', {{pronounced|wəˈkoʊvijə}} (wah-KO-vee-yah), has its origins in the [[Latin]] form of the [[Austria]]n name ''[[Wachau]]''.<ref name="facts"/> When [[Moravian Church|Moravian]] settlers arrived in [[Bethabara, North Carolina]], in 1753, they gave this name to the land they acquired, because it resembled the Wachau valley along the [[Danube|Danube River]].<ref name="facts"/> The area formerly known as Wachovia now makes up most of [[Forsyth County, North Carolina|Forsyth County]], and the largest city is now [[Winston-Salem, North Carolina|Winston-Salem]].

===First Union===
[[Image:FirstUnionLogo.png|right|thumb|Longtime First Union logo]]

'''First Union Corporation''' was founded as Union National Bank on June 2, 1908, a small banking desk in the lobby of a Charlotte hotel by H.M. Victor.

The bank merged with First National Bank and Trust Company of [[Asheville]] in 1958 to become First Union National Bank of North Carolina.<ref name=funb/> First Union Corporation was incorporated in 1967. Other Predecessor companies include the [[Bank of North America]], the first bank proposed, chartered and incorporated in America on December 31, 1781.

As part of a corporate reorganization in 1968, a predecessor of First Union National Bank and First Union Mortgage Corporation, a mortgage banking firm acquired in 1964 became subsidiaries of First Union Corp creating the structure the bank utilized until the 2001 merger.

Starting in 1985, with the Supreme Court decision upholding regional interstate banking legislation, First Union focused on an aggressive growth strategy and from 1985 through the merger with Wachovia in 2001, First Union completed over 90 banking-related acquisitions, 50 of which were completed between 1985 and 1995.<ref>[http://www.sec.gov/Archives/edgar/data/36995/000095014401500307/g67410e10-k.txt First Union Corp. SEC Form 10-K Annual Report for 2000]. (Final 10-K prior to announcement of the Wachovia merger)</ref><ref>[http://www.sec.gov/Archives/edgar/data/36995/0000950168-95-000134.txt First Union Corp. SEC Form 10-K Annual Report for 1995].</ref>

====CoreStates====
[[Image:corestates.jpg|right|thumb|CoreStates logo]]
In April 1998, First Union acquired [[CoreStates|CoreStates Financial Corporation]], headquartered in [[Philadelphia, Pennsylvania|Philadelphia]]. At the time, this was the largest merger in US banking history.

Core States traced its history to 1781 and the [[Bank of North America]], the first bank chartered in the United States. Once the merger was accomplished, First Union began to claim 1781 as its founding date. Wachovia still operates The Bank of North America's first branch, opened in 1782, which is now the longest continuously operated branch in America.<ref name=funb>{{cite web |title=First Union |publisher=Wachovia Corporation |url=http://firstunion.com/ |accessdate=2007-10-14 }}</ref>

The acquisition of Core States brought problems with it. Many of these problems arose when First Union attempted a too rapid integration of CoreStates' systems into First Union's. Initially, CoreStates tellers received insufficient training with the new systems and the two systems were unable to communicate with each other. This led to problems with account access and with payments not being correctly applied to loans.

====The Money Store====
On [[June 30]], [[1998]], First Union paid $2.1 billion for The Money Store, a loan outfit known for their commercials featuring [[Baseball Hall of Fame]] shortstop [[Phil Rizzuto]] and pitcher [[Jim Palmer]]. Two years later, it closed the unit, writing off $1.7 billion.<ref>{{cite web |last=Anderson |first=Mark |title=Down in flames: Why Money Store was a bust |work=Sacramento Business Journal |publisher=American City Business Journals, Inc. |date=2000-06-30 |url=http://www.bizjournals.com/sacramento/stories/2000/07/03/story7.html?t=printable |accessdate=2007-10-14 }}</ref>

===Legacy Wachovia===
[[Image:Legacy wachovia.png|right|thumb|Legacy Wachovia logo]]
Legacy '''Wachovia''' Corporation began in 1879 in [[Winston-Salem, North Carolina]] as the Wachovia National Bank. In 1911, the bank merged with Wachovia Loan and Trust, which had been founded in 1893. Wachovia grew to become one of the largest banks in the Southeast partly on the strength of its accounts from the [[R.J. Reynolds Tobacco Company]], which was also headquartered in Winston-Salem.<ref name="barbarians">{{cite book
|url=http://books.google.com/books?id=8rVQ6wKWdaYC
|publisher=''[[HarperCollins]]''
|date=2003|pages=40
|title=Barbarians at the Gate |first=Bryan |last=Burrough}}</ref> On [[December 12]] [[1986]], Wachovia purchased First Atlanta. Founded as Atlanta National Bank on September 14, 1865, and later renamed to First National Bank of Atlanta, this institution was the oldest national bank in Atlanta. This purchase made legacy Wachovia one of the few companies with dual headquarters: one in Winston-Salem and one in Atlanta. In 1998, legacy Wachovia acquired two Virginia-based banks, Jefferson National Bank and Central Fidelity Bank. In 1997, Wachovia acquired both 1st United Bancorp and American Bankshares Inc, giving its first entry into [[Florida]]. In 2000, legacy Wachovia made its final purchase, which was Republic Security Bank. Legacy Wachovia ceased to exist when First Union purchased the company in 2001.

===Merger of First Union and Wachovia===
On [[April 16]], [[2001]], Charlotte-based First Union Corporation announced it would merge with Winston-Salem based Wachovia Corporation. As an important part of the deal, First Union would shed its name and assumed the Wachovia identity and stock ticker. This merger was viewed with great surprise by the financial press and security analysts. <ref name="surprise">{{cite web |title=Big Banking Merger: Investors, Beware |publisher=The Motley Fool |date=2001-04-16 |url=http://www.fool.com/news/foth/2001/foth010416.htm }}</ref> While Wachovia had been viewed as an acquisition candidate after running into problems with earnings and credit quality in 2000, the suitor shocked analysts as many speculated that Wachovia would be sold to [[SunTrust]].<ref name="firstunion">{{cite web |title=THE MARKETS: Market Place; First Union Pursues Wachovia, Making Offer of $13.1 Billion|publisher=The New York Times |date=2001-04-17 |url=http://www.nytimes.com/2001/04/17/business/markets-market-place-first-union-pursues-wachovia-making-offer-13.1-billion.html}}</ref>

The deal met with skepticism and criticism. Analysts, remembering the problems with the CoreStates acquisition, were concerned First Union's ability to merge with another large company. Winston-Salem's citizens and politicians suffered a blow to their civic pride because Wachovia's corporate headquarters would move to Charlotte, a larger city than Winston-Salem. The city of Winston-Salem was concerned both by job losses and the loss of stature from losing a major corporate headquarters. First Union was concerned by the potential deposit attrition and customer loss in the city.<ref>[http://www.wachovia.com/inside/page/0,,134_307_348_1272_1280%5E221,00.html "Wachovia and First Union announce Winston-Salem as base for the new Wachovia's Wealth Management Business"] Wachovia press release, August 30, 2001</ref> First Union responded to these concerns by placing the wealth management and Carolinas-region headquarters in Winston-Salem.

On May 14, 2001, Atlanta-based [[SunTrust]] announced a rival takeover bid for Wachovia, the first hostile takeover attempt in the banking sector in many years. In its effort to make the deal appeal to investors, SunTrust argued that it would provide a smoother transition than First Union and offered a higher cash price for Wachovia stock than First Union.<ref name="suntrust">{{cite web |title=SunTrust Makes Bid for Wachovia, Criticizing First Union's Offer |publisher=The New York Times |date=2001-05-15 |url=http://www.nytimes.com/2001/05/15/business/suntrust-makes-bid-for-wachovia-criticizing-first-union-s-offer.html}}</ref>

Wachovia's board of directors rejected SunTrust's offer and supported the merger with First Union. SunTrust continued its hostile takeover attempt, leading to a bitter battle over the summer between SunTrust and First Union.<ref name="hostile">{{cite web |title=Market Place; First Union's Bid for Wachovia Gains Momentum |publisher=The New York Times |date=2001-06-01 |url=http://www.nytimes.com/2001/06/07/business/market-place-first-union-s-bid-for-wachovia-gains-momentum.html }}</ref> Both banks increased their offers for Wachovia, took out newspaper ads, mailed letters to shareholders, and initiated court battles to challenge each other's takeover bids.<ref name="media">{{cite web |title=Rivals Waging A Media War Over Wachovia |publisher=The New York Times |date=2001-07-21 |url=http://www.nytimes.com/2001/07/21/business/rivals-waging-a-media-war-over-wachovia.html}}</ref> On [[August 3]], [[2001]], Wachovia shareholders approved the First Union deal, rejecting SunTrust's attempts to elect a new board of directors for Wachovia and ending SunTrust's hostile takeover attempt.<ref name="wachoviavote">{{cite web |title=Wachovia Says Takeover Vote Went Its Way|publisher=The New York Times |date=2001-08-04 |url=http://www.nytimes.com/2001/08/04/business/wachovia-says-takeover-vote-went-its-way.html}}</ref>

Another problem concerned each bank's credit card division. In April 2001, Wachovia agreed to sell its $8 billion credit card portfolio to [[Bank One]]. The cards, which would have still been branded as Wachovia, would have been issued through Bank One's First USA division. First Union had sold its credit card portfolio to [[MBNA]] in August 2000.<ref name="creditcard">{{cite web |title=THE MARKETS: Market Place; Questions over the sale of a credit card operation cloud a deal to merge banks.|publisher=The New York Times |date=2001-05-02 |url=http://www.nytimes.com/2001/05/02/business/markets-market-place-questions-over-sale-credit-card-operation-cloud-deal-merge.html}}</ref> After entering into negotiations, the new Wachovia agreed to buy back its portfolio from Bank One in September 2001 and resell it to MBNA. Wachovia paid Bank One a $350 million [[termination fee]].

On [[September 4]], 2001, First Union and Wachovia officially merged to form the new Wachovia Corporation, though First Union was the surviving entity. In order to prevent a repeat of the CoreStates problems, the new Wachovia took its time phasing-in the conversion of legacy Wachovia computer systems to First Union systems. The company first began converting systems in the southeast United States (where both banks had branches), before moving to the Northeast, where First Union branches only had to change their signs to reflect the new company name and logo. This process officially ended on [[August 18]], [[2003]], almost 2 years after the merger took place.<ref>{{cite press release |title=Wachovia Completes Merger Integration On Schedule, Under Budget, With Added Convenience For Customers |publisher=Wachovia Corporation |date=2003-08-18 |url=http://www.wachovia.com/inside/page/0,,134_307%5E927,00.html |accessdate=2007-10-14 }}</ref>

In comparison to the CoreStates purchase, the merger of First Union and Wachovia was billed as a success by analysts. The company's deliberate pace of conversion seems to have prevented any large-scale [[customer attrition]]. In fact, every year since the merger, Wachovia has been ranked number one in customer satisfaction among major banks by the [[University of Michigan]]'s annual [[American Customer Satisfaction Index]].<ref>{{cite web |title=Scores By Industry |publisher=American Customer Satisfaction Index |url=http://www.theacsi.org/index.php?option=com_content&task=view&id=147&Itemid=155&i=Banks |format=chart |accessdate=2007-08-06 }}</ref>

When Wachovia and First Union merged, Charlotte, North Carolina's One, Two, Three, and Four First Union buildings became One, Two, Three, and Four, Wachovia Center (respectively), and the 55-story First Union Financial Center in downtown [[Miami, Florida|Miami]] became the [[Wachovia Financial Center]]. The merger also affected the names of the indoor professional sports arenas in [[Philadelphia]] and [[Wilkes-Barre, Pennsylvania]]. Formerly known as the First Union Center and the First Union Spectrum (both Philadelphia) and First Union Arena (Wilkes-Barre), they are now the [[Wachovia Center]], [[Wachovia Spectrum]], and [[Wachovia Arena at Casey Plaza]], respectively.

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (up to the Wachovia and First Union merger of 2001). The list is not comprehensive.

{{clade | style=font-size:90%;line-height:130%
|label1= '''[[Image:Wachovia logo.svg|100px|Wachovia logo]]<br>Wachovia&nbsp;'''<br>''(merged&nbsp;2001)''
|1= {{clade
|label1='''[[Image:FirstUnionLogo.png|75px|First Union logo]]<br>First Union Corp.&nbsp;'''<br>''(est.&nbsp;1998)''
|1={{clade
|label1='''First Union Corporation''' <br>(Formerly: ''First Union National Bank'')<br> ''(est. 1958)''
|1={{clade
|1='''Union National Bank'''<br>''(est. 1908)''
|2='''First National <br> Bank & Trust '''
}}
|2='''CoreStates Financial'''<br>''(dates to 1781)''
}}

|label2='''[[Image:Legacy wachovia.png|75px|Legacy Wachovia logo]]Wachovia <br>Corporation'''&nbsp;<br>''(merged 1986)''
|2={{clade
|label1='''Wachovia Bank & Trust'''<br>''(merged 1911)''
|1={{clade
|1='''Wachovia National Bank'''<br>(Formerly: ''Bank of Salem'')<br>(est. 1879)''
|2='''Wachovia Loan & Trust '''<br>''(est. 1893)''
}}
|3='''First Atlanta'''<br>(Formerly Atlanta National Bank)<br>''(est. 1865)''
}}
}}}}

===Acquisitions===
Between 2001 and 2006, Wachovia bought several other financial services companies in an attempt to become a national bank and comprehensive financial services company.

====Prudential Securities====
Wachovia Securities and the Prudential Securities Division of [[Prudential Financial, Inc.]] combined to form Wachovia Securities LLC on [[July 1]], 2003. Wachovia owns 62% of this entity, while Prudential Financial owns 38%.<ref name=prudential/> At the time, the new firm had client assets of $532.1 billion, making it the nation's third largest full service retail brokerage firm based on assets.<ref name=prudential>{{cite press release |title=Wachovia Corp. and Prudential Financial, Inc. Complete Combination of Brokerage Units |publisher=Wachovia Corporation |date=2003-07-01 |url=http://www.wachovia.com/inside/page/0,,134_307%5E906,00.html |accessdate=2007-10-14 }}</ref>

====Metropolitan West Securities====
On [[October 22]], [[2003]], Wachovia announced it would acquire Metropolitan West Securities, an affiliate company of [[Metropolitan West Financial]].<ref>{{cite press release |title=Wachovia Announces Agreement To Acquire Metropolitan West Securities, LLC |publisher=Wachovia Corporation |date=2003-10-22 |url=http://www.wachovia.com/inside/page/0,,134_307%5E963,00.html |accessdate=2007-10-14 }}</ref> This acquisition added a portfolio of over $50 billion of securities on loan to the Wachovia Global Securities Lending division.

====SouthTrust====
[[Image:SouthTrust.png|right|thumb|SouthTrust logo]]
On [[November 1]], [[2004]], Wachovia completed the acquisition of [[Birmingham, Alabama]]-based [[SouthTrust|SouthTrust Corporation]], a transaction valued at $14.3 billion. The merger created the largest bank in the southeast United States, the fourth largest bank in terms of holdings, and the second largest in terms of number of branches. Integration was completed by the end of 2005.<ref>{{cite press release |title=Wachovia Completes SouthTrust Merger Integration |publisher=Wachovia Corporation |date=2005-12-05 |url=http://www.wachovia.com/inside/page/0,,134_307%5E1282,00.html |accessdate=2007-10-14 }}</ref>

====Failed MBNA Purchase====
In June 2005, Wachovia negotiated to purchase monoline credit card company MBNA. However, the deal fell through when Wachovia balked at MBNA's purchase price. Within a week of the deal's collapse, MBNA entered into an agreement to be purchased by Wachovia's chief rival, [[Bank of America]]. Wachovia received $100 million out of this deal, the result of an agreement Wachovia predecessor First Union made in 2000 when it sold its credit card portfolio to MBNA. This agreement required MBNA to pay this sum if it were ever sold to a competitor. In late 2005 Wachovia announced that it would end its relationship with MBNA and start up its own credit card division so that the bank could issue its own [[Visa (company)|Visa]] cards

====Westcorp====
[[Image:Westcorp logo.png|right|thumb|Westcorp logo]]
Westcorp, Western Financial Bank's parent company, WFS Financial Inc. and Wachovia announced a proposed acquisition by Wachovia in September 2005. Westcorp and WFS Financial Inc. shareholders approved the acquisition on Jan. 6, 2006 and on March 1, 2006, the merger was complete. This acquisition made Wachovia the ninth largest auto finance lender in the competitive U.S. auto finance market and provided Wachovia with a small retail and commercial banking presence in [[southern California]].<ref>{{cite press release |title=Wachovia Completes Merger With Westcorp and WFS Financial Inc. |publisher=Wachovia Corporation |date=2006-03-01 |url=http://www.wachovia.com/inside/page/0,,134_307%5E1323,00.html |accessdate=2007-10-14 }}</ref> On February 12th, 2007, the former 19 Western Financial Bank branches opened under the Wachovia name. These branches became the launching point for a much larger Wachovia presence in California with the acquisition and integration of World Savings Bank in 2007.

====Golden West Financial====
[[Image:Worldsavingslogo.jpg|right|thumb|WorldSavings logo]]

Wachovia agreed to purchase [[Golden West Financial]] for a little under $25.5 billion on [[May 7]] [[2006]].<ref name=goldenwest/><ref>{{cite press release |title=Wachovia To Acquire Golden West Financial, Nation's Most Admired and 2nd Largest Savings Institution |publisher=Wachovia Corporation |date=2006-05-07 |url=http://www.wachovia.com/inside/page/0,,134_307%5E1344,00.html |accessdate=2007-07-18 }}</ref> This acquisition gave Wachovia an additional 285-branch network spanning 10 states. Wachovia greatly raised its profile in California, where Golden West held $32 billion in deposits and operated 123 branches.<ref name=goldenwest>{{cite news |title=Wachovia acquires Golden West Financial |publisher=Associated Press |date=2006-05-08 |url=http://www.msnbc.msn.com/id/12680868/from/RSS/ |accessdate=2007-07-18 }}</ref>

Golden West, which operated branches under the name World Savings Bank, was the second largest [[savings and loan]] in the United States. The business was a small savings and loan in the San Francisco Bay area when it was purchased in 1963 for $4 million by [[Herb Sandler|Herbert and Marion Sandler]]. In 2006, Golden West Financial was named the "Most Admired Company" in the [[Mortgage loan|mortgage]] services business by [[Fortune magazine]].<ref>{{cite web |title=Fortune: America's Most Admired Companies 2006 |publisher=CNNMoney.com |url=http://money.cnn.com/magazines/fortune/mostadmired/snapshots/574.html |accessdate=2007-07-18 }}</ref> By the time Wachovia announced its acquisition, Golden West had over $125 billion in assets and 11,600 employees. By [[October 2]] [[2006]] Wachovia had closed the acquisition of Golden West Financial Corporation. The Sandlers agreed to remain on the board at Wachovia.<ref name=goldenwest/>

The Sandlers sold their firm at the top of the market, saying that they were growing older and wanted to devote themselves to philanthropy. A year earlier, in 2005, World Savings lending had started to slow, after more than quadrupling since 1998. Some current and former Wachovia officials say that the merger was agreed to in days and that it was impossible to conduct a thorough vetting of World Savings’ loans. They noted that the creditworthiness of World Savings borrowers edged down from 2004 to 2006, while Pick-A-Pay borrowers had credit scores well below the industry average for traditional loans. World Savings lending volume dipped again in 2006 shortly after the sale to Wachovia was initiated. This prompted World Savings to attract more borrowers by taking a step that some regulators were starting to frown upon, and which the company had been resisting for years: it allowed borrowers to make monthly payments based on an annual interest rate of just 1 percent. While World Savings continued to scrutinize borrowers’ ability to manage increased payments, the move to rock-bottom rates lured customers whose financial reliability was harder to verify. <ref>[http://www.nytimes.com/2008/12/25/business/25sandler.html?em=&pagewanted=print]</ref> [[New York Times]] reporter [[Floyd Norris]] has called World Savings a "ticking timebomb" that created "zombie homeowners".<ref>http://www.nytimes.com/2009/05/15/business/economy/15norris.html?ref=business</ref>

While Wachovia Chairman and CEO G. Kennedy "Ken" Thompson had described Golden West as a "crown jewel", investors did not react positively to the deal at the time. Analysts have since said that Wachovia purchased Golden West at the peak of the US housing boom. Golden West's mortage-related problems led to Wachovia suffering writedowns and losses that far exceeded the price paid in the acquisition, ending up in the fire-sale of Wachovia to [[Wells Fargo]].<ref>[http://blogs.wsj.com/deals/2008/07/22/wachovia-golden-west-another-deal-from-hell/?mod=googlenews_wsj]</ref>

====A.G. Edwards====
[[Image:AGEdwardnewlogo.png|thumb|right]]
On May 31, 2007, Wachovia announced plans to purchase [[A. G. Edwards]] for $6.8 billion to create the United States' second largest retail brokerage firm.<ref>{{cite web |title=Wachovia to buy A.G. Edwards for $6.8B |publisher=CNNMoney.com |date=2007-05-31 |url=http://money.cnn.com/2007/05/31/news/companies/wachovia.reut/index.htm?postversion=2007053106}}</ref> The acquisition closed on October 1, 2007. In early March 2008 Wachovia began to phase out the AG Edwards brand in favor of a unified Wachovia Securities.

[[Image:Autumn Atlanta 1 036.jpg|thumb|left|Atlanta, Georgia Headquarters at Atlantic Station]]

==2007-2009 financial crisis==
Exposed to risky loans, such as [[adjustable rate mortgages]] acquired during the Golden West acquisition, Wachovia began to experience heavy losses in its loan portfolios during the [[subprime mortgage crisis]].<ref>{{cite web|title=Wachovia reportedly in talks with three suitors|publisher=Dow Jones|url=http://www.marketwatch.com/news/story/wachovia-reportedly-talks-three-suitors/story.aspx?guid=%7B27BDCA8E-4B3F-4793-A142-28EC29262506%7D|accessdate=2009-05-01}}</ref><ref name="downfall">{{cite web |title=Wachovia dealt to Citigroup after 129 years as independent |publisher=Winston-Salem Journal |date=2008-09-30 |url=http://www2.journalnow.com/content/2008/sep/30/wachovia-dealt-to-citigroup-after-129-years-as-ind/ }}</ref>

In the first quarter of 2007, Wachovia reported $2.3 billion in earnings, including acquisitions and divestitures.<ref>{{cite web|title=Wachovia Earns $2.30 Billion, EPS Up 10% to $1.20 in 1st Quarter 2007|publisher=Press release|url=http://www.wachovia.com/inside/page/0,,134_307%5E1461,00.html|accessdate=2007-04-26}}</ref> However, in the second quarter of 2008, Wachovia reported a much larger than anticipated $8.9 billion loss.<ref>{{cite web|title=Wachovia Details 2nd Quarter Loss; Outlines Initiatives to Preserve and Generate Capital, Protect Strong Liquidity and Reduce Risk
|publisher=Press release|url=http://www.wachovia.com/inside/page/0,,134_307%5E1777,00.html|accessdate=2008-07-22}}</ref>

On [[June 02]], [[2008]], Wachovia Corp. [[chief executive officer]] [[G. Kennedy Thompson|Ken Thompson]] was pushed out as head of Wachovia.
<ref>{{cite news |author=IEVA M. AUGSTUMS, AP Business Writer|title=Wachovia board forces out CEO Ken Thompson|url=http://news.yahoo.com/s/ap/20080602/ap_on_bi_ge/wachovia_ceo |format=HTML |work=Yahoo News|publisher=CHARLOTTE, N.C |date=2008-06-02 |accessdate=2008-06-02 }}</ref>
The board of the Charlotte-based bank said it asked Thompson, 58, to retire and replaced him on an interim basis with Chairman Lanty Smith. Smith had already replaced Thompson as chairman last month in a move the bank said "strengthens independent leadership" at the company.

On [[July 09]], [[2008]], Wachovia Corp. hired Treasury Undersecretary [[Robert K. Steel]] as chief executive, citing his vast and varied financial experience as critical to managing the company through the company's financial trouble.<ref>{{cite news |format=HTML |url=http://www.usatoday.com/money/industries/banking/2008-07-09-wachovia-ceo_N.htm?csp=34 |work=USA Today |publisher=USA Today |title=Wachovia names Treasury undersecretary new CEO }}</ref>

===Forced Government Sale===
After Steel took over, he insisted that Wachovia would stay independent. However, its stock price plunged 27 percent during trading on [[September 26]] due to the seizure of [[Washington Mutual]] the previous night. On the same day, several businesses and institutional depositors withdrew money from their accounts in order to drop their balances below the $100,000 insured by the FDIC--an event known in banking circles as a "silent run." Ultimately, Wachovia lost a total of $5 billion in deposits that day--about one percent of the bank's total deposits.<ref>Rothacker, Rick. [http://www.charlotteobserver.com/597/story/246983.html $5 billion withdrawn in one day in silent run]. ''[[The Charlotte Observer]]'', 2008-10-11</ref> The large outflow of deposits attracted the attention of the [[Office of the Comptroller of the Currency]], which regulates national banks. Federal regulators pressured Wachovia to put itself up for sale over the weekend; had Wachovia failed, it would have been a severe drain on the FDIC's insurance fund due to its size.<ref name="StOnge">St. Onge, Peter. [http://www.charlotteobserver.com/business/story/222685.html Stunningly swift fall for Wachovia]. ''[[The Charlotte Observer]]'', 2008-09-30.</ref><ref name="SilentRun">Rothacker, Rick; and Kerry Hall. [http://www.charlotteobserver.com/business/story/226799.html Wachovia faced a ‘silent' bank run]. ''[[The Charlotte Observer]]'', 2008-10-02.</ref>

As business halted for the weekend, Wachovia was already in talks with Citigroup and Wells Fargo. Wells Fargo initially emerged as the frontrunner to acquire the ailing Wachovia's banking operations, but backed out due to concerns over Wachovia's commercial loans. By this time, regulators were concerned that Wachovia wouldn't have enough short-term funding to open for business on September 29. In order to obtain enough liquidity to do business, banks usually depend on short-term loans to each other. However, the markets had been so battered by a credit crisis related to the housing bubble that banks were skittish about making such loans. Under the circumstances, regulators feared that if customers pulled out more money, Wachovia wouldn't have enough liquidity to meet its obligations.<ref name="SilentRun"/>

On 29 September 2008, the [[Federal Deposit Insurance Corporation]] (FDIC), acting under a 1991 law empowering it to deal with large bank failures on short notice, announced that [[Citigroup]] would acquire Wachovia Corporation's banking operations. The transaction was to be an "open bank" transfer of ownership. Wachovia's bank subsidiaries did not fail, nor were they placed into receivership. The transaction would have been facilitated by the FDIC, with the concurrence of the [[Board of Governors of the Federal Reserve]] and the [[Secretary of the Treasury]] in consultation with the President. The FDIC's open bank assistance procedures normally require the FDIC to find the cheapest way to rescue a failing bank. However, the FDIC bypassed this requirement after determining that a potential failure of Wachovia posed a "systemic risk" to the health of the economy. Steel had little choice but to agree, and the decision was announced roughly 45 minutes before the markets opened.<ref name="SilentRun"/><ref name='FDIC-Wachovia-2008-09-29'>
{{cite news | first= | last= | coauthors= | title= Citigroup Inc. to Acquire Banking Operations of Wachovia: FDIC, Federal Reserve and Treasury Agree to Provide Open Bank Assistance to Protect Depositors | date= 2008-09-29 | publisher= [[Federal Deposit Insurance Corporation]] | url = http://www.fdic.gov/news/news/press/2008/pr08088.html | work = Press Releases | pages = | accessdate = 2008-09-29}}
</ref><ref name= 'Wachovia-Bank Subsidiary Divestitures-2008-09-29'>
{{cite news | first= | last= | coauthors= | title= Wachovia Announces Bank Subsidiary Divestitures to Citigroup: Wachovia Corporation to become a focused leader in retail brokerage and asset management. | date= 2008-09-29 | publisher= | url = http://www.wachovia.com/inside/page/0,,134_307^1803,00.html | work = Wachovia Press Release | pages = | accessdate = 2008-09-29 }}
</ref><ref>
{{cite news |author=Financial Times|title=Citi to acquire Wachovia|url=http://ftalphaville.ft.com/blog/2008/09/29/16435/citi-to-acquire-wachovia/ |format=HTML |work=Financial Times|publisher=LONDON, UK|date=2008-09-29 |accessdate=2008-09-29 }}
</ref>

In addition, the FDIC said that the agency would absorb Citigroup's losses above $42 billion; Wachovia's loan portfolio is valued at $312 billion. In exchange for assuming this risk, the FDIC will receive $12 billion in preferred stock and warrants from Citigroup.<ref name='FDIC-Wachovia-2008-09-29'/><ref name='Bloomberg-2008-09-29'/><ref>
http://www.nytimes.com/2008/09/30/business/30bank.html?ref=business
</ref><ref>
http://www.bizjournals.com/tampabay/stories/2008/09/29/daily1.html
</ref> The transaction would have been an all-stock transfer, with Wachovia Corporation stockholders to receive stock from Citigroup, valuing Wachovia stock at about one dollar per share for a total transaction value of about $2.16 billion. Citigroup will also assume Wachovia’s senior and subordinated debt.<ref name='NYT-Dash-2008-09-29'/><ref name='Bloomberg-2008-09-29'/> Citigroup intends to sell ten billion dollars of new stock on the open market to recapitalize its purchased banking operations.<ref name='Bloomberg-2008-09-29'>
{{cite news | first= Steve | last= Dickson | coauthors= David Mildenberg | title= Citigroup Agrees to Buy Wachovia's Banking Business (Update6) | date= 2008-09-29 | publisher= Bloomberg LLC | url = http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agVqu_CIqFyw | work = Bloomberg.com | pages = | accessdate = 2008-09-29}}
</ref>
The proposed closing date for the Wachovia purchase was by the end of the year, 2008.<ref name='Citigroup-Press Release-2008-09-29'>
{{cite news | first= | last= | coauthors= | title= Citi and Wachovia Reach Agreement-in-Principle for Citi to Acquire Wachovia's Banking Operations in An FDIC-Assisted Transaction
| date= 2008-09-29 | publisher= CitiGroup | url = http://www.citigroup.com/citi/press/2008/080929a.htm | work = Press Room | pages = | accessdate = 2008-09-29 }}
</ref>ref name= 'FDIC-Wachovia-2008-09-29'/><ref name= 'Wachovia-Bank Subsidiary Divestitures-2008-09-29'/><ref>
{{cite web |url=http://ap.google.com/article/ALeqM5jBpTstzcj2LSvdE72t247CeMqW6QD93GK7K00 |title=Citigroup to buy Wachovia banking operations|author=Sara Lepro |date=2008-09-29 |publisher=[[The Associated Press]] }}
</ref><ref name='Citigroup-Press Release-2008-09-29'>
{{cite news | first= | last= | coauthors= | title= Citi and Wachovia Reach Agreement-in-Principle for Citi to Acquire Wachovia's Banking Operations in An FDIC-Assisted Transaction
| date= 2008-09-29 | publisher= Citigroup | url = http://www.citigroup.com/citi/press/2008/080929a.htm | work = Press Room | pages = | accessdate = 2008-09-29 }} </ref>


Wachovia expected to continue as a publicly traded company, retaining its retail brokerage arm, Wachovia Securities and [[Evergreen Investments |Evergreen mutual funds]].<ref name='NYT-Dash-2008-09-29'>
{{cite news | first= Eric | last= Dash | coauthors= Andrew Ross Sorkin | title= Citigroup Buys Bank Operations of Wachovia | date= 2008-09-29 | publisher= New York Times | url = http://www.nytimes.com/2008/09/30/business/30bank.html | work = nytimes.com | pages = | accessdate = 2008-09-29}}
</ref> At the time, Wachovia Securities had 14,600 financial advisers and managed more than $1 trillion, third in the U.S. after [[Merrill Lynch]] and Citigroup's [[Smith Barney]].<ref name='Bloomberg-2008-09-29'/>

The announcement drew some criticism from Wachovia stockholders who felt the dollar-per-share price was too cheap. Some of them planned to try to defeat the deal when it came up for shareholder approval. However, [[institutional investor]]s such as [[mutual fund]]s and [[pension fund]]s controlled 73 percent of Wachovia's stock; individual stockholders would have had to garner a significant amount of support from institutional shareholders to derail the sale. Also, several experts in corporate dealmaking told [[The Charlotte Observer]] that such a strategy is very risky since federal regulators helped broker the deal. One financial expert told the ''Observer'' that if Wachovia's shareholders voted the deal down, the OCC could have simply seized Wachovia and placed it into the [[receivership]] of the FDIC, which would then sell it to Citigroup. Had this happened, Wachovia's shareholders risked being completely wiped out.<ref>Rexrode, Christina; and Jen Aronoff. [http://www.charlotteobserver.com/408/story/226825.html Shareholders talk of fighting Citi deal]. ''[[The Charlotte Observer]]'', 2008-10-02.</ref>

===Bidding battle for Wachovia===
On October 3, 2008, [[Wells Fargo]] and Wachovia announced they had agreed to merge in an all-stock transaction requiring no FDIC involvement, apparently nullifying the Citigroup deal. Wells Fargo announced it had agreed to acquire Wachovia for $15.1 billion in stock. Wachovia stated that it Wells Fargo deal over the Citigroup deal, as it is a much higher valuation than the Citigroup deal, it keeps the banking and brokerage businesses together, and has less of an overlapping territory between the banks, as Wells Fargo is dominant in the [[Western United States|West]] and [[Midwestern United States|Midwest]] compared to the redundant footprint of Wachovia and [[Citibank]] along the [[East Coast of the United States|Atlantic Seaboard]] and in the [[Southern United States|South]]. Citigroup explored their legal options, demanding that Wachovia and Wells Fargo cease discussions, citing an exclusivity agreement between Citigroup and Wachovia.<ref>{{cite news |first=Eric |last=Dash |title=Wells Fargo in a Deal to Buy All of Wachovia |url=http://www.nytimes.com/2008/10/04/business/04bank.html |work=[[The New York Times]] |date=2008-10-03 |accessdate=2008-10-03 }}</ref><ref name="WellsFargo-PR-2008-10-03">{{cite news | title = WELLS FARGO, WACHOVIA AGREE TO MERGE| url= https://www.wellsfargo.com/downloads/pdf/press/WFC_WB_100308.pdf|date=2008-10-03|accessdate=2008-10-03|publisher=[[Wells Fargo]]}}</ref>

On October 4, 2008 a New York judge issued a temporary injunction blocking the transaction from going forward while the situation was sorted out.<ref>[http://biz.yahoo.com/ap/081005/wells_fargo_wachovia.html?.v=15 Citi: Wells Fargo blocked from buying Wachovia]</ref> However, this ruling was overturned.<ref name="nyt frenzy" />

On October 9, 2008, Citigroup abandoned their attempt to purchase Wachovia, allowing Wells Fargo to proceed with a transaction instead. However, Citigroup is still pursuing its $60 billion claims, $20 billion in compensatory and $40 billion in punitive damages, against Wells Fargo for alleged violations of the exclusivity agreement.<ref>{{cite news
|url=http://news.yahoo.com/s/ap/20081010/ap_on_bi_ge/citigroup_wachovia;_ylt=Au.LOFdC.8Fk_XdXxm2lM_qyBhIF
|title=Wells Fargo plans to buy Wachovia; Citi ends talks
|publisher=AP/Yahoo
|date=2008-10-09
|accessdate=2008-10-10
}}</ref>

The Federal Reserve approved the merger with Wells Fargo on October 12, 2008.<ref>{{cite web|url=http://www.federalreserve.gov/newsevents/press/orders/20081012a.htm|title=FRB: Press Release--Approval of proposal by Wells Fargo &amp; Company to acquire Wachovia Corporation|publisher=Federal Reserve Board|date=2008-10-12|accessdate=2008-10-12}}</ref><ref>{{cite web|url=http://www.bloomberg.com/apps/news?pid=20601087&sid=a8ganS9VJerk|title=Fed Approves Wells Fargo's Takeover Bid for Wachovia|publisher=Bloomberg|date=2008-10-12|accessdate=2008-10-12}}</ref>

==Purchase by Wells Fargo==
==Purchase by Wells Fargo==
On October 3, Wachovia announced the entire company would instead be merging with Wells Fargo. Wells Fargo will pay $15.1 billion--roughly $7 per share--to buy Wachovia. Unlike the Citigroup deal, the Wells Fargo deal will require no assistance from the federal government. The combined company will be headquartered in [[San Francisco]], home to Wells Fargo. However, Charlotte will be the headquarters for the combined company's East Coast banking operations, and Wachovia Securities will remain in St. Louis. Three members of the Wachovia board will join the Wells Fargo board. Both companies' boards unanimously approved the merger on the night of October 2. <ref name="WellsFargo-PR-2008-10-03" /> Citigroup has already taken measures to stop the Wells Fargo-Wachovia merger, claiming that Wells Fargo has engaged in "tortious interference" with an exclusivity agreement between Citigroup and Wachovia. That agreement states in part that until [[October 6]], [[2008]] "Wachovia shall not, and shall not permit any of its subsidiaries or any of its or their respective officers, directors, [...] to [...] take any action to facilitate or encourage the submission of any Acquisition Proposal."<ref>{{cite news
On October 3, Wachovia announced the entire company would instead be merging with Wells Fargo.</ref><ref name="WellsFargo-PR-2008-10-03">{{cite news | title = WELLS FARGO, WACHOVIA AGREE TO MERGE| url= https://www.wellsfargo.com/downloads/pdf/press/WFC_WB_100308.pdf|date=2008-10-03|accessdate=2008-10-03|publisher=[[Wells Fargo]]}}</ref> Wells Fargo announced it would pay $15.1 billion--roughly $7 per share--to buy Wachovia. Unlike the Citigroup deal, the Wells Fargo deal required no assistance from the federal government. The combined company will be headquartered in [[San Francisco]], home to Wells Fargo. However, Charlotte will be the headquarters for the combined company's East Coast banking operations, and Wachovia Securities will remain in St. Louis. Three members of the Wachovia board will join the Wells Fargo board. Both companies' boards unanimously approved the merger on the night of October 2. <ref name="WellsFargo-PR-2008-10-03" /> Citigroup has already taken measures to stop the Wells Fargo-Wachovia merger, claiming that Wells Fargo has engaged in "tortious interference" with an exclusivity agreement between Citigroup and Wachovia. That agreement states in part that until [[October 6]], [[2008]] "Wachovia shall not, and shall not permit any of its subsidiaries or any of its or their respective officers, directors, [...] to [...] take any action to facilitate or encourage the submission of any Acquisition Proposal."<ref>{{cite news|url=http://graphics8.nytimes.com/images/blogs/dealbook/wachovia_exclusivity.pdf|title=Wachovia-Citigroup Exclusivity Agreement|publisher=The New York Times|date=2008-10-03|accessdate=2008-10-05}}</ref> <ref>{{cite news|url=http://news.yahoo.com/s/ap/20081010/ap_on_bi_ge/citigroup_wachovia;_ylt=Au.LOFdC.8Fk_XdXxm2lM_qyBhIF|title=Wells Fargo plans to buy Wachovia; Citi ends talks |publisher=AP/Yahoo|date=2008-10-09|accessdate=2008-10-10}}</ref>Wachovia and Wells Fargo argue that the Citigroup agreement was never binding, and that the Wells Fargo deal is better for Wachovia.<ref>Rothacker, Rick; and Christina Rexrode. [http://www.charlotteobserver.com/100/story/229509.html Citigroup strikes back at proposed Wachovia-Wells Fargo merger deal]. ''[[The Charlotte Observer]]'', 2008-10-03.</ref> However, Citigroup convinced Justice Charles E. Ramos of the [[New York State Supreme Court]] to grant a preliminary injunction temporarily blocking the Wells Fargo deal.<ref>{{cite news|url=http://www.nytimes.com/2008/10/05/business/05bank.html|title=Citigroup Says Judge’s Order Suspends Wachovia Deal |publisher=The New York Times|date=2008-10-04|first=Eric|last=Dash|coauthors=Jonathan D. Glater}}</ref> This ruling was later overturned by Judge James M. McGuire of the [[New York Court of Appeals|New York State Court of Appeals]], partly because he believed Ramos did not have the right to rule on the case in Connecticut.<ref name="nyt frenzy">{{cite news|url=http://www.nytimes.com/2008/10/06/business/06bank.html?bl&ex=1223438400&en=f895f0fd514c47fb&ei=5087%0A|title=Weekend Legal Frenzy Between Citigroup and Wells Fargo for Wachovia |publisher=The New York Times|date=2008-10-06|accessdate=2008-10-06}}</ref>
|url=http://graphics8.nytimes.com/images/blogs/dealbook/wachovia_exclusivity.pdf
|title=Wachovia-Citigroup Exclusivity Agreement
|publisher=The New York Times
|date=2008-10-03
|accessdate=2008-10-05
}}</ref> Wachovia and Wells Fargo argue that the Citigroup agreement was never binding, and that the Wells Fargo deal is better for Wachovia.<ref>Rothacker, Rick; and Christina Rexrode. [http://www.charlotteobserver.com/100/story/229509.html Citigroup strikes back at proposed Wachovia-Wells Fargo merger deal]. ''[[The Charlotte Observer]]'', 2008-10-03.</ref> However, Citigroup convinced Justice Charles E. Ramos of the [[New York State Supreme Court]] to grant a preliminary injunction temporarily blocking the Wells Fargo deal.<ref>{{cite news
|url=http://www.nytimes.com/2008/10/05/business/05bank.html
|title=Citigroup Says Judge’s Order Suspends Wachovia Deal
|publisher=The New York Times
|date=2008-10-04
|first=Eric
|last=Dash
|coauthors=Jonathan D. Glater
}}</ref> This ruling was later overturned by Judge James M. McGuire of the [[New York Court of Appeals|New York State Court of Appeals]], partly because he believed Ramos did not have the right to rule on the case in Connecticut.<ref name="nyt frenzy">{{cite news
|url=http://www.nytimes.com/2008/10/06/business/06bank.html?bl&ex=1223438400&en=f895f0fd514c47fb&ei=5087%0A
|title=Weekend Legal Frenzy Between Citigroup and Wells Fargo for Wachovia
|publisher=The New York Times
|date=2008-10-06
|accessdate=2008-10-06
}}</ref>


On October 12 the [[U.S. Federal Reserve]] approved Wells Fargo's takeover of the bank, a deal that would create the largest bank branch network in the United States. A Federal Reserve statement said: "The Federal Reserve Board [today] announced its approval of the application ... by Wells Fargo & Company, San Francisco, California, to acquire Wachovia Corporation and its subsidiary banks," the Fed said in a statement on its website. The approval was adopted by an unanimous board decision following Citigroup's decision three days earlier to end court efforts to block Wachovia's merger with Wells Fargo, after having claimed it was illegal after its own, and U.S. government-backed, takeover deal forged Sept. 28.<Ref>http://www.etaiwannews.com/etn/news_content.php?id=762220</ref>
On October 12 the [[U.S. Federal Reserve]] approved Wells Fargo's takeover of the bank, a deal that would create the largest bank branch network in the United States. A Federal Reserve statement said: "The Federal Reserve Board [today] announced its approval of the application ... by Wells Fargo & Company, San Francisco, California, to acquire Wachovia Corporation and its subsidiary banks," the Fed said in a statement on its website. The approval was adopted by an unanimous board decision following Citigroup's decision three days earlier to end court efforts to block Wachovia's merger with Wells Fargo, after having claimed it was illegal after its own, and U.S. government-backed, takeover deal forged Sept. 28.<Ref>http://www.etaiwannews.com/etn/news_content.php?id=762220</ref>


In filings unsealed two days before the merger approval in a New York federal court, Citigroup argued that its deal was better for U.S taxpayers and Wachovia shareholders. They said that they had exposed themselves to "substantial economic risk" by stating their intent to rescue Wachovia after less than 72 hours of due diligence. Citigroup had obtained an exclusive agreement tn order to protect itself.<ref>http://www.bizjournals.com/jacksonville/stories/2008/10/13/daily6.html Filings outline demise of Citi-Wachovia deal</ref> Wachovia suffered a $23.9 billion loss in the third quarter.<ref>{{cite news
In filings unsealed two days before the merger approval in a New York federal court, Citigroup argued that its deal was better for U.S taxpayers and Wachovia shareholders. They said that they had exposed themselves to "substantial economic risk" by stating their intent to rescue Wachovia after less than 72 hours of due diligence. Citigroup had obtained an exclusive agreement tn order to protect itself.<ref>http://www.bizjournals.com/jacksonville/stories/2008/10/13/daily6.html Filings outline demise of Citi-Wachovia deal</ref> Wachovia suffered a $23.9 billion loss in the third quarter.<ref>{{cite news|url=http://www.nytimes.com/2008/10/23/business/23wachovia.html?em|title=Wachovia Reports $23.9 Billion Loss for Third Quarter |publisher=The New York Times|date=2008-10-22|accessdate=2008-10-22}}</ref>
|url=http://www.nytimes.com/2008/10/23/business/23wachovia.html?em
|title=Wachovia Reports $23.9 Billion Loss for Third Quarter
|publisher=The New York Times
|date=2008-10-22
|accessdate=2008-10-22
}}</ref>


Wells Fargo's purchase of Wachovia closed on January 1, 2009.
Wells Fargo's purchase of Wachovia closed on January 1, 2009.

Revision as of 16:01, 7 June 2009

Purchase by Wells Fargo

On October 3, Wachovia announced the entire company would instead be merging with Wells Fargo.</ref>[1] Wells Fargo announced it would pay $15.1 billion--roughly $7 per share--to buy Wachovia. Unlike the Citigroup deal, the Wells Fargo deal required no assistance from the federal government. The combined company will be headquartered in San Francisco, home to Wells Fargo. However, Charlotte will be the headquarters for the combined company's East Coast banking operations, and Wachovia Securities will remain in St. Louis. Three members of the Wachovia board will join the Wells Fargo board. Both companies' boards unanimously approved the merger on the night of October 2. [1] Citigroup has already taken measures to stop the Wells Fargo-Wachovia merger, claiming that Wells Fargo has engaged in "tortious interference" with an exclusivity agreement between Citigroup and Wachovia. That agreement states in part that until October 6, 2008 "Wachovia shall not, and shall not permit any of its subsidiaries or any of its or their respective officers, directors, [...] to [...] take any action to facilitate or encourage the submission of any Acquisition Proposal."[2] [3]Wachovia and Wells Fargo argue that the Citigroup agreement was never binding, and that the Wells Fargo deal is better for Wachovia.[4] However, Citigroup convinced Justice Charles E. Ramos of the New York State Supreme Court to grant a preliminary injunction temporarily blocking the Wells Fargo deal.[5] This ruling was later overturned by Judge James M. McGuire of the New York State Court of Appeals, partly because he believed Ramos did not have the right to rule on the case in Connecticut.[6]

On October 12 the U.S. Federal Reserve approved Wells Fargo's takeover of the bank, a deal that would create the largest bank branch network in the United States. A Federal Reserve statement said: "The Federal Reserve Board [today] announced its approval of the application ... by Wells Fargo & Company, San Francisco, California, to acquire Wachovia Corporation and its subsidiary banks," the Fed said in a statement on its website. The approval was adopted by an unanimous board decision following Citigroup's decision three days earlier to end court efforts to block Wachovia's merger with Wells Fargo, after having claimed it was illegal after its own, and U.S. government-backed, takeover deal forged Sept. 28.[7]

In filings unsealed two days before the merger approval in a New York federal court, Citigroup argued that its deal was better for U.S taxpayers and Wachovia shareholders. They said that they had exposed themselves to "substantial economic risk" by stating their intent to rescue Wachovia after less than 72 hours of due diligence. Citigroup had obtained an exclusive agreement tn order to protect itself.[8] Wachovia suffered a $23.9 billion loss in the third quarter.[9]

Wells Fargo's purchase of Wachovia closed on January 1, 2009.

Controversies

Michael Serricchio, a broker for Prudential Securities, was called to active duty in the Air Force reserve, but was not offered his old position back after his military stint was over. He sued Wachovia, who had purchased Prudential. A jury found that Wachovia had breached the Uniformed Services Employment and Re-employment Rights Act by intentionally making Serricchio an offer that they knew that he would reject.[10][11]

A New York Times article titled "Corporate Profits, From Data Sold to Thieves"[12] published on May 20 2007 described Wachovia's negligence in screening on taking action against companies connected to identity theft. These companies used stolen identities to remove funds from personal Wachovia bank accounts via unsigned checks.

The article goes on to say "In all, Wachovia accepted $142 million of unsigned checks from companies that made unauthorized withdrawals from thousands of accounts, federal prosecutors say. Wachovia collected millions of dollars in fees from those companies, even as it failed to act on warnings, according to records." Furthermore, the article adds "In a lawsuit filed last year, the United States attorney in Philadelphia said Wachovia received thousands of warnings that it was processing fraudulent checks, but ignored them."

On April 25, 2008, Wachovia agreed to pay up to $144 million to end the investigation without admitting wrongdoing.[13] The investigation found that Wachovia had failed to conduct suitable due diligence, and that it would have discovered the thefts if it had followed normal procedures. The penalty is one of the largest ever demanded by the Office of the Comptroller of the Currency.

There have been at least two documented incidents where customers encountered receiving or almost receiving counterfeit money from Wachovia bank tellers. In June 2008 a woman in Orange County, Florida, claimed she was almost given a pair of counterfeit $20 bills and the teller realized it before giving them to her. [14] In July, 2008 a couple claimed that, at an Orlando, Florida branch, they withdrew 36 $100 bills. Upon an attempt to deposit them at a Bank of America, 10 of them were found to be counterfeit. Wachovia did not refund any of the money, citing that it could not be proven that the counterfeit money came from them. [15] In both incidents the Secret Service investigated.

In April 2008 Wachovia was investigated by United States federal prosecutors as part of a probe into drug money laundering by Mexican and Colombian money-transferring firms. The investigation of the alleged laundering also included other large U.S. banks. Meanwhile at the same time Wachovia announced a $144 million settlement for federal charges that it had failed to stop telemarketers from taking advantage of thousands of elderly consumers.[16]

References

  1. ^ a b "WELLS FARGO, WACHOVIA AGREE TO MERGE" (PDF). Wells Fargo. 2008-10-03. Retrieved 2008-10-03.
  2. ^ "Wachovia-Citigroup Exclusivity Agreement" (PDF). The New York Times. 2008-10-03. Retrieved 2008-10-05.
  3. ^ "Wells Fargo plans to buy Wachovia; Citi ends talks". AP/Yahoo. 2008-10-09. Retrieved 2008-10-10.
  4. ^ Rothacker, Rick; and Christina Rexrode. Citigroup strikes back at proposed Wachovia-Wells Fargo merger deal. The Charlotte Observer, 2008-10-03.
  5. ^ Dash, Eric (2008-10-04). "Citigroup Says Judge's Order Suspends Wachovia Deal". The New York Times. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
  6. ^ "Weekend Legal Frenzy Between Citigroup and Wells Fargo for Wachovia". The New York Times. 2008-10-06. Retrieved 2008-10-06.
  7. ^ http://www.etaiwannews.com/etn/news_content.php?id=762220
  8. ^ http://www.bizjournals.com/jacksonville/stories/2008/10/13/daily6.html Filings outline demise of Citi-Wachovia deal
  9. ^ "Wachovia Reports $23.9 Billion Loss for Third Quarter". The New York Times. 2008-10-22. Retrieved 2008-10-22.
  10. ^ [1]
  11. ^ [2]
  12. ^ "Corporate Profits, From Data Sold to Thieves". New York Times. Retrieved 2007-05-20.
  13. ^ Charles Duhigg (2008-04-26). "Big Fine Set for Wachovia to End Case" (HTML). The New York Times. The New York Times Company. Retrieved 2008-04-27.
  14. ^ WFTV 9 (2008-06-26). "Woman Claims She Was Given Counterfeit $20 Bills At Bank" (HTML). WFTV 9. ORANGE COUNTY, FL. Retrieved 2008-07-23.{{cite news}}: CS1 maint: numeric names: authors list (link)
  15. ^ LOCAL 6 (2008-07-22). "Bank Gave Counterfeit Bills, Couple Says" (HTML). Local 6 News. ORLANDO, FL. Retrieved 2008-07-23.{{cite news}}: CS1 maint: numeric names: authors list (link)
  16. ^ CNNMONEY.COM (2008-04-26). "Feds look at Wachovia in drug money probe" (HTML). CNN. CNNMONEY.COM. Retrieved 2008-07-23. {{cite news}}: |author= has generic name (help)
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