In a July 22, 2008 Wall Street Journal article it was reported
Wachovia took a loss of $8.66 billion for the current period, after posting a net profit of $2.34 billion a the prior year.
In response to the huge loss, the bank slashed its quarterly dividend to five cents a share and decided to exit the business of wholesale mortgage origination. Like many of its banking and brokerage peers, Wachovia was stung by taking huge gambles in the subprime mortgage sector. Wachovia’s Evergreen Ultra Short Opportunities Fund has also expierienced huge losses, as have the fund’s investors as a result of subprime investments.
Wachovia is just the latest in a long line of financial institutions that are struggling with the fallout from subprime exposure. Other firms facing investor lawsuits over the failure to disclose the extent of subprime exposure include Morgan Keegan and Fidelity Investments. Please contact our office for more information.