New York Attorney General Andrew Cuomo is stepping up efforts to force the remaining banks and brokers that haven’t fallen in line on the ARS scandal to agree to settlements. Goldman Sachs (GS), Deutsche Bank (DB), and Bank of America (BAC). WSJ:
In the widened probe targeting the three firms, Mr. Cuomo’s office has been gathering more documents, conducting witness interviews and assigning more lawyers to investigate the companies’ auction-rate operations. Settlement discussions with the firms and with other regulators investigating these firms have also ramped up, people in the office say.
Cuomo has also dismissed claims made by several smaller brokers that they too were bamboozled by the bigger banks which, in addition to selling ARS, actually ran the auctions:
“Attorney General Cuomo’s investigation has already begun to uncover some disturbing facts that seem to belie the innocent picture of downstream brokerages you paint in your letter,” Benjamin Lawsky, deputy counselor and special assistant to Mr. Cuomo, wrote in the letter. Mr. Lawsky referred in particular to Fidelity’s marketing of auction-rate securities to wealthy clients.
See Also: Wachovia (WB), JP Morgan (JPM), Morgan (MS) To Settle ARS Scandal; Merrill (MER) Refuses
UBS Agrees To Buy Back $19 billion Of ARS From Hosed Clients*
Smaller Brokerages: UBS Defrauded Us In ARS Scandal, Too–They Should Pay
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