Associated Press
08.03.2004

Wachovia Corp. disclosed Tuesday that federal regulators are poised to take action against the banking giant and several executives regarding stock purchases and financial reports related to its 2001 merger with First Union Corp.

Wachovia said it received a notice from the Securities and Exchange Commission on July 23 that the SEC was investigating and planned to bring civil charges against it. Such a notice from the agency, known as a Wells notice, allows companies the opportunity to respond before a formal complaint is filed.

In a regulatory filing, Wachovia also disclosed that SEC staff was considering a civil action against a subsidiary, Evergreen Investment Management, for alleged improper trading of mutual funds.

SEC spokesman John Nester declined comment.

Wachovia, based in Charlotte, N.C., merged with First Union in late 2001 in a $14.6 billion deal creating the nation's fourth-largest banking company with operations from Florida to Connecticut. The merger ended a bitter takeover battle in which Atlanta-based SunTrust Banks had challenged First Union's bid with a $15.1 billion unsolicited offer for Wachovia. The combined bank took the Wachovia name.

Wachovia said in its filing that the SEC had subpoenaed documents related to executives' purchases of Wachovia and First Union shares in the period following the announcement of the stock-swap merger plan on April 16, 2001. A month later, SunTrust jumped in with its unsolicited takeover offer.

Shares of Wachovia fell 49 cents to $44.05 in midday trading on the New York Stock Exchange.

In June, Wachovia announced that it was buying competitor SouthTrust Corp. of Birmingham, Ala., in a deal valued at $14.3 billion. The combination would create the largest bank in the southeastern United States and give Wachovia new leverage in the large Texas banking market.

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