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Thursday, August 22, 2019

BofA prepared to settle auction-rate securities probe

By Chris Rizo | Sep 5, 2008

Andrew Cuomo (D)

NEW YORK (Legal Newsline) - Bank of America Corp. says it's ready to settle investigations into its marketing of auction-rate securities.

The Charlotte, N.C.-based bank, which is the second-largest U.S. bank by assets, said it wants to settle claims similarly to how other
financial institutions did with federal and state attorneys general.

"We are ready and willing to enter into an agreement that follows the same basic terms of previously announced settlements," BofA spokeswoman Shirley Norton said in a statement. "We understood that we had reached such an agreement in principle nearly two weeks ago."

Banks have been accused of illegally misrepresenting to clients the risks of investing in auction-rate securities for which the interest rate or dividend is reset periodically through an auction mechanism. The market for auction-rate securities soured earlier this year.

New York Attorney General Andrew Cuomo is expected to subpoena several Bank of America officials this week. On Wednesday, Massachusetts Secretary of State William Galvin threatened to sue Bank of America after failing to reach a settlement.

In all, eight Wall Street banks -- including Citigroup Inc., Goldman Sachs Inc. and UBS AG -- have settled with regulators over auction-rate securities. The banks have agreed to ARS buybacks totaling about $50 billion.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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