Attorney General Cuomo Announces Release Of Assurances Of Discontinuance With Six Firms In Its Investigation Of Auction Rate Securities

 

NEW YORK, NY (June 3, 2009) - Attorney General Andrew M. Cuomo today announced Assurances of Discontinuance with Banc of America Securities LLC and Banc of America Investment Services, Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., JPMorgan Chase & Co., Morgan Stanley & Co. Inc. and RBC Capital Markets Corporation relating to the auction rate securities settlements reached last summer. The Assurances detail how the firms have and will continue to provide liquidity to investors who purchased auction rate securities.

Attorney General Cuomo last year settled allegations that eleven securities firms made misrepresentations in their marketing and sale of auction rate securities. As a result of the Assurances released today and settlements with other regulators, the settling firms have to date bought back billions of auction rate securities from investors. Significant additional liquidity has been restored to the market through other obligations imposed by these settlements.

“These historic settlements provided billions to cash-strapped consumers and gave investors the confidence that regulators are looking out for their interests,” said Attorney General Andrew Cuomo. “Our goal has been to give investors relief from the collapse of the auction rate securities market, which is exactly what these deals do."

From the beginning of his investigation into the auction-rate market, the Attorney General’s objective has been to bring relief to investors stuck with illiquid auction rate securities. To date, regulatory settlements called for over $61 billion in investor buy-backs, representing the largest return on behalf of investors ever. Additional obligations to facilitate liquidity solutions for investors still holding auction rate securities have resulted in billions more in buy-backs, refinancing or redemptions.

The Attorney General thanked the North American Securities Administrators Association (NASAA), the NASAA multi-state ARS Task Force and the Financial Industry Regulatory Authority (FINRA), for their efforts in achieving these settlements. He also thanked the Colorado Division of Securities, Florida Division of Securities, Illinois Securities Department and the New Jersey Bureau of Securities.

In addition, the Attorney General thanked the Securities and Exchange Commission and its staff for their assistance and cooperation in the auction-rate securities investigations.

Assistant Attorneys General Vicki Andreadis, Thomas Teige Carroll, Peter Dean, Pamela Lynam Mahon, Armen Morian, Christopher Mulvihill, Daniel Sangeap, Alisha C. Smith, and Ethan Zlotchew, conducted these investigations along with Kitty Kay Chan, Economist for the Division of Economic Justice, all under the supervision of David A. Markowitz, Chief of the Investor Protection Bureau, and Eric Corngold, Executive Deputy Attorney General for Economic Justice.

Cuomo’s auction-rate securities investigation continues as to other market participants.

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