Citigroup Agrees to Buy Back Auction Rate Securities, Pay Fine

Without admitting to or denying allegations of auction rate securities (ARS) fraud, Citigroup Inc., the nation’s largest bank by assets, agreed to buy back $7.5 billion worth of its customers’ ARS holdings. The bank also agreed to start “restoring liquidity” to another $12 billion worth of ARS and pay regulators a $100 million fine.

The agreement was reached between Citigroup and the Securities and Exchange Commission (SEC), NY Attorney General Andrew Cuomo, and regulators from several states, including Texas.

Citigroup is the first to reach such a settlement in the ongoing auction rate securities debacle. The $19.5 billion in ARS that it promised to address accounts for only 9% of the $200 billion worth of ARS that are still frozen.

For more information, contact an auction rate securities attorney today at 800-220-9341.

UBS Settles Massachusetts Suit

On Wednesday, Swiss bank UBS agreed to settle with Massachusetts attorney general Martha Coakley in a case filed against the bank for allegedly fraudulent business practices. UBS has agreed to pay $1 million to the state government for the expenses of the lawsuit and the losses suffered by local governments. They will also buy back $3.4 million worth of ARS sold to 17 towns and cities around the state. The bank has not formally admitted any wrongdoing.

If you have lost money to a dishonest broker or bank, contact auction rate securities lawyers Williams Kherkher at 800.220.9341.

Texas Securities Regulators Turn Up the Heat

On July 22, the Texas State Securities Board notified Swiss Bank UBS that a hearing would be held in late September about the bank’s allegedly fraudulent practices when selling auction rate securities to investors. If found guilty, the bank could temporarily lose its securities licenses until investors have regained the money lost in the collapse of the ARS market. The SSB announced Monday that the hearing is being pushed back to October 21, because of settlement talks with UBS.

Although UBS is not the only bank implicated in the ARS market collapse (Merril Lynch and Citigroup have also been targeted by inspections, among others) UBS seems to be under particularly intense scrutiny, especially in Texas. Citigroup recently contacted former employees who now work for UBS, advising them to return to their former place of employment because of the pressure being put on UBS.

If you have lost money to a fraudulent broker or bank, contact auction rate securities attorneys Williams Kherkher at  800.220.9341 today.

Top UBS Lawyer Resigns

David Aufhauser, age 57, was a top lawyer at Swiss bank UBS’s investment banking branch until August 4. He has resigned from his position after being referenced in a civil complaint by New York’s Attorney General Andrew Cuomo. Aufhauser has been accused of misleading his clients about the risks of auction rate securities at a time when his firm was trying desperately to clean up problems with the market. The ARS market collapsed earlier this year, leaving many investors unable to access their assets.

If you have lost money to a fraudulent bank or broker, contact ARS lawsuit attorneys Williams Kherkher at 800.220.9341 to discuss your legal options.

Former Credit Suisse Broker Flees Auction Rate Securities Fraud Charges

Authorities believe that a former Credit Suisse securities broker may have fled the United States to escape possible criminal charges in connection with his sales of auction rate securities (ARS).

Julian Tzolov, one of two former Credit Suisse brokers under investigation by federal prosecutors for possible violation of securities laws, is believed to have left the country and returned to his native Bulgaria. According to prosecutors, Tzolov allegedly sold auction rate securities to institutional clients using fraudulent tactics, such as implying that the ARS were backed by student loans, when in fact they were linked to risky subprime mortgage loans - a market which collapsed not long after.

If you have been deceived by brokers or investment firms about auction rate securities, call an ARS attorney today at 800-220-9341 to discuss your legal options.