Fidelity Agrees to Repurchase $300M in Auction-rate Securities

Fidelity Investments has agreed to join other brokerage firms in the buy back of millions of dollar in auction-rate securities after the crash of the market last February. As investigations have uncovered numerous cases of broker misconduct, the brokerages have been working with government agencies to repurchases the failed investments of thousands of investors.

Fidelity will buy back around $300 million in auction-rate securities, despite denying that they had much to do with the sale of these investments. Fidelity states that their actions are prompted by their long term commitment to their customers.

For more information about auction-rate securities, contact the auction-rate securities fraud lawyers of Williams Kherkher by calling 800-220-9341.

Comerica To Repurchase $1.46 Billion in Auction Rate Securities

Comerica Bank’s parenty company, Comerica Inc., has recently agreed to repurchase $1.46 billion in auction rate securities. Comerica worked with the Michigan attorney general and the Michigan Office of Financial and Insurance Regulation to settle on the agreement amount some time last week.

Several calls and complaints filed by Michigan residents began the investigation. These residents claimed to have been encouraged to invest in auction rate securities and told that they were similar to CDs that could be easily exchanged for cash. When the market crashed last February, these investors were left with nothing, having never been informed of the risk involved in auction rate securities.

Comerica will also be responsible for paying the State of Michigan a civil penalty in the amount of $10,000, as well as $100,000 to the Michigan Investor Protection Trust Fund.

If you were mislead to believe that auction rate securities were a safe investment, contact the auction rate securities fraud lawyers of Williams Kherkher by calling 800.220.9341 today.

Forty Brokerages Now Involved in Auction Rate Securities Investigation

As promised, New York Attorney General Andrew Cuomo has turned his attention on 40 brokerages that sold auction-rate securities to investors but did not underwrite the debt. Until now, these investigations have focused on the big investment banks. The investigation of smaller brokerages begins this Monday as the Financial Industry Regulatory Authority (FINRA) gears up to complete on-site examinations at the brokerages.

FINRA will be trying to determine whether or not each brokerage was aware of the problems in the market and whether or not they attempted to warn investors of the potential risks.

These investigations have led to settlements with eight large firms. These firms have agreed to repurchase around $50 billion of the $60 billion in auction-rate securities debt.

In an interview on CNBC, Cuomo stated, “We’re starting with the largest banks, in terms of number of people involved…and we’re working our way down the list. We’re now focusing on some of the mid-size players in the market.”

For more information on auction-rate securities fraud or to schedule a consultation with a lawyer, contact the auction-rate securities lawyers of Williams Kherkher by calling 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.

Conflict of Interest May Have Prompted UBS’ Auction Rate Securities Sales

According to company e-mails, the rapid and aggressive sale of auction rate securities (ARS) by financial giant UBS may have been prompted by a conflict of interest.

Although documents suggesting that UBS had warned some customers of trouble in the auction rate securities market but continued to sell the securities to others had been uncovered by the Boston Globe several weeks ago, e-mails disclosed after Massachusetts Secretary of State William F. Galvin filed charges of fraud against UBS reveal that the company’s aggressive efforts to sell ARS to its clients may have been a willful effort to unload problematic company holdings onto unsuspecting investors.

Several e-mails sent by David Shulman, head of UBS’ municipal securities division, show that the company was actively trying to “move inventory” onto clients to get rid of a “huge albatross” of auction rate securities, totaling some $11 billion, which the Swiss bank had purchased in efforts to shore up waning demand in the ARS market.Salesmen were provided with more marketing tools to sell the unwanted securities to investors, even as Shulman sold his own auction rate holdings due to a self-proclaimed change in “risk tolerance.”

The fact that top UBS officials clearly knew, months in advance, that the auction rate market was headed for a fall, that ARS were no longer good “paper” to hold, and that they were planning to pull their support from ARS auctions, and still continued to sell the securities to their customers shows that, when a conflict of interest arises between a bank and its clients, it is almost always the clients who lose out.

Have you been taken advantage of by the fraudulent practices of investment firms and broker-dealers like UBS? If so, call 800-220-9341 today to speak with an auction rate securities fraud lawyer about your case.