Citigroup Settles Auction-Rate Case With...
Fort Worth Star-Telegram (Fort Worth, Texas) | Today, 10:24 AM EST
By Barry Shlachter, Fort Worth Star-Telegram, Texas
Aug. 8--Citigroup has agreed to pay $100 million in fines and buy back more than $7 billion worth of auction-rate securities from 40,000 investors who were misled into believing that the investments would be easily redeemable, New York Attorney General Andrew Cuomo said Thursday.
Cuomo said investors were told that the securities were "the equivalent to cash," but they were left high and dry when the market suddenly collapsed in February.
"It's an industrywide situation," he said, adding that other banks were also involved.
Denise Voigt Crawford, commissioner of the Texas State Securities Board, which was the lead state agency investigating with Cuomo's office, said public notice has been issued that the large Swiss bank UBS is being similarly investigated. She declined to say what other banks were being investigated.
Crawford said that while most Citigroup brokers were "duped" into believing that the securities were easily redeemable, their superiors knew that auctions were not foolproof because one as recently as 2006 had failed, tying up investors' funds.
Auction-rate securities are bonds with interest rates that... Read the Full Story
Aug. 8--Citigroup has agreed to pay $100 million in fines and buy back more than $7 billion worth of auction-rate securities from 40,000 investors who were misled into believing that the investments would be easily redeemable, New York Attorney General Andrew Cuomo said Thursday.
Cuomo said investors were told that the securities were "the equivalent to cash," but they were left high and dry when the market suddenly collapsed in February.
"It's an industrywide situation," he said, adding that other banks were also involved.
Denise Voigt Crawford, commissioner of the Texas State Securities Board, which was the lead state agency investigating with Cuomo's office, said public notice has been issued that the large Swiss bank UBS is being similarly investigated. She declined to say what other banks were being investigated.
Crawford said that while most Citigroup brokers were "duped" into believing that the securities were easily redeemable, their superiors knew that auctions were not foolproof because one as recently as 2006 had failed, tying up investors' funds.
Auction-rate securities are bonds with interest rates that... Read the Full Story
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