Days after a former Fannie Mae executive failed to have SEC charges against him dismissed, a former VP for Wells Fargo is now dealing with charges from the government watchdog.

SEC announced Tuesday that it has charged Wells Fargo’s brokerage firm and former VP Shawn McMurtry for selling investments tied to mortgage-backed securities without fully understanding them or disclosing the risks involved.

According to a release from SEC, Wells Fargo sold asset-backed commercial paper (ABCP) structured with high-risk mortgage backed securities and collateralized debt obligations (CDOs) to investors, including municipalities and non-profits. The bank did not obtain enough information about these investment vehicles, instead relying on their credit ratings.

SEC said the firm’s representatives did not understand the true nature, risks, and volatility behind such products and recommended them to investors with “conservative investment objectives.”

“Broker-dealers must do their homework before recommending complex investments to their customers,” said Elaine C. Greenberg, chief of the SEC Enforcement Division’s Municipal Securities and Public Pensions Unit. “Municipalities and other non-profit institutions were harmed because Wells Fargo abdicated its fundamental responsibility as a broker to have a reasonable basis for its investment recommendations to customers.”

SEC’s order for administrative proceedings found that the bank and its representatives did not have a reasonable basis for their recommendations beyond credit ratings. A number of customers purchased ABCP as a result of these recommendations, and many faced substantial losses after several programs defaulted in 2007.

SEC charged McMurtry specifically for his improper sale of the risky investments. According to the commission’s release, McMurtry exercised discretionary authority in violation of the Wells Fargo’s own policy and selected an issuer of ABCP for a longstanding municipal customer.

Wells Fargo and McMurty consented to SEC’s order without admitting or denying the charges. The San Francisco-based bank agreed to pay more than $6.5 million to settle the charges. McMurtry agreed to be suspended from the securities industry for six months and to pay a $25,000 penalty. The settlement money will go into a Fair Fund for the benefit of the harmed investors.

While SEC called the firms actions “negligent,” the commission’s order found that the bank has taken remedial measures since 2007 to make sure its representatives have adequate information about the nature and risk of the securities they recommend.