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.

FINRA Creates New Arbitration Process

The Financial Industry Regulatory Authority (FINRA) has recently announced that they have created a new process for auction-rate securities arbitration claims. This new process gives investors the option to have their claims heard by a three person panel in which none of the arbitrators have an affiliation with a firm that recently sold auction-rate securities.

This new process has been created after the Securities and Exchange Commission reached a settlement with Citigroup. The new three person arbitration panel would include one non-public arbitrator and two public arbitrators. This process differs from the all-public arbitration panel that will be offered as a pilot program on October 6, 2008.

According to the FINRA, over 170 cases of auction-rate securities fraud have been filed since February. If you experienced financial damages due to the failure of your auction-rate securities investments, contact an auction-rate securities fraud lawyer right away.

Call 800-220-9341 to schedule a consultation with a skilled auction-rate securities fraud lawyer at the law offices of Williams Kherkher.

FINRA Launches Pilot Program to Evaluate Arbitration Panels

Merrill Lynch, Citigroup Global Markets, Wachovia Securities, Charles Schwab, Morgan Stanley, and UBS have agreed to participate in the Financial Industry Regulatory Authority’s new pilot program to evaluate the arbitration process.

This two-year pilot program will allow some investors to choose whether they would like an arbitration made up of three public arbitrators or the traditional panel of one non-public arbitrator and two public arbitrators.

According to FINRA representatives,  only the investor making the arbitration claim can decide to participate in the pilot program. The firms will not have the option to decide which cases will be included as part of the pilot program. Investors who would like to participate in the pilot program will be able to as of October 6, 2008.

For more information on the arbitration process and your legal rights, contact the auction-rate securities lawyers of Williams Kherkher by calling 800-220-9341.

Auction Rate Securities Investigations: Bank of America Subpoenaed

Bank of America Corporation has recently received subpoenas from state and federal government agencies, as well as requests for information on auction-rate securities. In February 2008, the auctions that were meant to set the rates of these securities began to fail, causing investors to panic and the government agencies to become suspicious of brokers’ role in the matter.

Bank of America also faces various class-action lawsuits that accuse the bank of misrepresenting auction-rate securities to investors.

The Securities and Exchange Commission has requested documents and information dating from 1992 to 2008. Bank of America also faces the investigation of its new subsidiary, Countrywide Financial Corp.

If you have suffered financial losses due to dishonest brokers or banks, contact the auction rate securities lawyers of Williams Kherkher at 800.220.9341.

Morgan Stanley To Repurchase ARS

Morgan Stanley, along with USB and Citigroup, has announced that they will be repurchasing auction-rate securities that were purchased before February 13th, 2008. Last week, USB and Citigroup agreed to return over $20 billion to investors.

After the $330 billion collapse that the market faced in February, the New York Attorney General has been looking into the cause of such a financially catastrophic event.

Although Morgan Stanley is attempting to make amends with  angry investors, Attorney General Andrew Cuomo is not impressed. “This is too little, too late, and our investigation into Morgan Stanley continues,” noted Alex Detrick. Cuomo’s spokesman.

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