New York's Metropolitan Transportation Authority put business with Wells Fargo Securities and the firm's approval as a senior manager for bond transactions on hold pending its review of the bank's practices.

"The responsibility review relating to Wells Fargo Securities … has not been completed because the review of recent developments that have been reported in the press is ongoing," finance manager Patrick McCoy told members of the board's finance committee on Monday. "Until such time we will not be using Wells Fargo Securities for any future underwritings."

Federal prosecutors launched a preliminary inquiry into sales practices at parent Wells Fargo after revelations that thousands of its employees secretly created accounts without clients' approval. The Consumer Financial Protection Bureau fined Wells Fargo $185 million in penalties earlier this month for allegedly creating 2 million bank and credit card accounts for customers without their knowledge.

According to McCoy, the MTA has completed its "responsibility review" on other banks that responded to a request for proposals in March for designation in four pools for underwriting assignments on bond and note issues relating to the MTA-financed portion of approved capital programs.

The MTA approved Wells Fargo conditionally among seven firms for senior manager roles.

"If we're able to reach a determination that Wells Fargo is a responsible party, we'll share those facts and our analysis with the board, and we'll bring our selection back to the board," said the MTA's chief financial officer, Robert Foran.

Board member Lawrence Schwartz called the revelations about wrongdoing at Wells Fargo disturbing.

"I find it personally difficult to think that they could pass a responsibility test, but there's a due-diligence process that the agency goes through and so I think we should respect the process," Schwartz said.

The finance committee approved pools of senior managers, co-senior managers, co-managers and selling group members. The full board is scheduled to vote on the motion on Wednesday.

A selection committee weighed such criteria as capital position; syndicate performance since the last RFP in 2013; ongoing service to the MTA; experience with large transportation issues; and diversity goals and policies.

"The MTA continues to lower barriers to entry and create opportunities" for women- and minority-owned business enterprises and disabled-veteran-owned firms, McCoy said.

Two of the seven senior underwriting positions recommended are minority-owned firms Ramirez & Co. and Siebert Cisneros Shank & Co. LLC.

New York City Comptroller Scott Stringer, in a speech last week at the business group Association for a Better New York, praised the MTA's minority-and-women business enterprise program under chief diversity officer Michael Garner.

"It's working. More than 20% of the agency's massive capital plan is now flowing to minority and women business owners," Stringer said. "And it's actually saving taxpayer dollars, because the bids that come in from small businesses are often lower than what the agency budgeted."

The following firms received MTA approval, pending Wednesday's board vote:

Senior managers: Goldman, Sachs & Co.; Bank of America Merrill Lynch; Ramirez & Co.; Wells Fargo Securities (conditional); Citigroup; Siebert Cisneros Shank & Co. LLC; and JPMorgan.

Senior co-managers: Jefferies LLC; Loop Capital Markets LLC; Morgan Stanley; RBC Capital Markets; and a joint venture of Williams Capital Group LP and PNC Capital Markets LLC.

Co-managers: Academy Securities Inc.; Alamo Capital; Barclays Capital; Blaylock Beal Van LLC; BNY Mellon Capital Markets LLC; Cabrera Capital Markets LLC; Drexel Hamilton LLC; Fidelity Capital Markets; FTN Financial; Keybanc Capital Markets; Piper Jaffray & Co.; Raymond James; Rice Financial Products; Stern Brothers & Co.; Stifel, Nicolaus & Co.; and TD Securities.

Selling group members: Backstrom McCarley Berry & Co.; Duncan-Williams Inc.; Estrada Hinojosa & Co.; Great Pacific Securities; Herbert J Sims & Co.; Hilltop Securities Inc.; Hutchinson, Shockey, Erley & Co.; Janney Montgomery Scott; Lebenthal & Co LLC; M&T Securities Inc.; Mesirow Financial Inc.; Mischler Financial; Mizuho Securities USA; NW Financial Group LLC; Oppenheimer & Co.; Prager & Co. LLC; Robert W. Baird & Co.; RockFleet Financial; Roosevelt & Cross Inc.; Toussaint Capital Partners; U.S. Bancorp; and Valdes & Moreno Inc.

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