NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo is including three more sellers of auction rate securities in his headline-making investigation of the industry.
JP Morgan Chase, Morgan Stanley and Wachovia were all sent letters by Cuomo, who has already reached agreements with Citigroup and Swiss bank UBS. The market for auction rate securities, investments that have their interest rates changed periodically by an auction, stumbled earlier this year, and Cuomo says the sellers misrepresented the liquidity of the market.
His agreements with Citigroup and UBS will return more than $20 billion to consumers nationwide.
"It would be unfair to consumers with accounts at other firms, and well as to the firms that settled, if our investigation were to slow down or stop," Cuomo wrote to JPMorgan Chase.
"Accordingly, our investigation's focus is shifting to the next group of market participants... We would like to enter into immediate talks about resolving the investigation, as that would be in the best interests of both consumers nationwide, as well as JPMorgan Chase customers.
"Any resolution would need to address the same concerns addressed in the settlements entered into next week."
Cuomo said the investigation has been ongoing for five months.
"Today we're expanding our investigation into the auction rate securities scandal to insure investors across New York State and the nation get their money back," Cuomo said.
"Last week my office secured landmark agreements that will put $20 billion back in the pockets of investors. We believe that when you protect the investor you also increase investor confidence, which helps the entire market."
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.