Wells Fargo & Co., the biggest bank on the U.S. West Coast, misrepresented to its customers the risks of buying $3.9 billion of auction-rate securities, a Washington state securities regulator claimed.

Wells Fargo "misrepresented and failed to disclose material information to their customers, and made unsuitable recommendations" to buy the securities, the Washington State Department of Financial Institutions said in an administrative order. The regulator said it will impose fines if the bank fails to comply with state securities laws. Wells Fargo can request a hearing on the allegations, the order said.

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