Wells Fargo is buying up most of Citadel’s troubled investment bank operation, which the Chicago-based hedge fund recently decided to unload after concluding that’s its plan to convert the company into an investment bank was not working out.

Wells Fargo said it is hiring 25 investment bankers from Citadel, including banking unit head Brian Maier, who will become vice chairman of client coverage at Wells Fargo Securities. Maier, before joining Citadel in 2009, had been with Merrill Lynch and Goldman Sachs.

In addition to the banking staff, Wells Fargo will also be acquiring Citadel’s banking business and the administrative staff of the investment banking unit.

In a statement, Wells Fargo Securities co-investment banking and capital markets Co-Head Robert A. Engel said, “These new additions complement our existing team, bringing added depth to specific industry sectors and increased advisory and capital markets product expertise where we have been looking to expand.”  He said the acquisition would also bring Wells Fargo new client relationships.

At the height of the financial crisis in 2008, Citadel set up its investment bank operation, hoping to take advantage of the weakened condition of the big Wall Street investment banks. But the brash plan to become a competitor in that industry was foiled when the investment banks, which all became banks and were recipients of government support through the Troubled Assets Relief Program (TARP), recovered handily by 2009.

As Wall Street’s investment banking operations rebounded, Citadel’s new investment banking operation suffered a series of major departures by key executives. Rohit D’Souze, who was hired in October 2008 to head the new bank’s securities trading business, jumped ship a year later. He was replaced by Patrik Edsparr, who left before another year had passed. Other division heads also left.

Other Citadel bankers who will be joining Wells Fargo Securities are Citadel executives Stephen Gerson, Aviv Laurence, Paul Pepe and Stavros Tsibiridis.

Citadel’s hedge fund is among the best performing in the industry and its two multi-strategy funds are up 14% on the year to date.

Citadel also holds a key stake in E*Trade, the electronic trading firm, but the Financial Times is reporting that the hedge fund is pressing the board of E*Trade to put itself up for sale.