3 More Wall Street Firms Agree to Buy Back Securities

Settlement reached after auction-rate securities market collapse

By Peter Fearon, Newser Staff

Posted Aug 22, 2008 2:23 AM CDT

(Newser) – Merrill Lynch, Goldman Sachs and Deutsche Bank have agreed to a settlement with New York's attorney general and other state regulators to buy back $14.5 billion of now worthless auction-rate securities. The brokerages will also pay $162 million in fines to settle charges that they misled investors into thinking the securities were as liquid as cash, reports the Financial Times.

The banks join five other other financial firms that have agreed to similar deals to avoid further legal action since the collapse of the $330 billion market in auction-rate securities in February. Officials from the Financial Industry Regulatory Authority are launching investigations at nearly 40 brokerages nationwide to determine if the firms adequately warned customers about risks in the auction-rate market, reports Bloomberg.

New York attorney general Andrew Cuomo has secured a deal with several Wall Street brokerages and banks to buy back billions of dollars in auction-rate securities. (AP Photo/Mike Groll, file)

Traders gather at the post that trades Merrill Lynch on the floor of the New York Stock Exchange. Merrill will pay the lion's share of a settlement buying back auction-rate securities. (AP Photo/Richard Drew)

Merrill Lynch will pay the lion's share of a settlement buying back auction rate securities. (AP Photo/Paul Sakuma, file)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Moody's Slaps Wall Street's Big Banks With Review

Along with most of Europe's banks

(NEWSER) - Moody's isn't feeling great about the health of the financial industry right now. The rating agency put a host of banks under review for possible downgrade today, including US giants Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley, the Wall Street Journal reports. It said the banks now faced "more fragile funding conditions, wider credit spreads, increased regulatory burdens" and "opacity of risk." Moody's already downgraded the banks last year to reflect its doubt that the government would ever provide a 2008-style bailout again. More»

Students Revolt Against Big Bank Recruiting

Protests spread across Ivy League campuses

(NEWSER) - Half of those surveyed in Harvard's class of 2010 went into finance or consulting; at the University of Pennsylvania, the figure was even higher—and some students are fed up with the "brain drain." Inspired in part by the Occupy movement, students have launched protests against recruiting by big banks, consulting firms, and hedge funds at top universities ranging from Princeton to Stanford, NPR reports. "You've got 20% to 30% of some of the top talent in this country going into a sector that is not necessarily contributing to economic and social productivity," says movement leader Teryn Norris. More»

SEC Letting Big Banks Skirt Fraud Penalties

'New York Times' analysis finds 350 instances of banks getting free passes

(NEWSER) - The Securities and Exchange Commission has repeatedly allowed Wall Street's biggest banks to avoid penalties specifically intended to punish and deter fraud, a New York Times analysis of SEC records reveals. Over the past decade, the SEC has on almost 350 occasions granted waivers exempting big financial companies from sanctions, allowing banks like Goldman Sachs and JP Morgan to continue to enjoy advantages, like protection from shareholder lawsuits, that are supposed to be reserved for the most dependable companies. More»

S&P Downgrades Credit Ratings of Top US Banks

Standard & Poor's applies new criteria to banks around the world

(AP) - Standard & Poor's is adjusting the ratings on 37 of the world's largest financial institutions, and that means downgrades for the biggest banks in the US. Bank of America and its main subsidiaries were among those cut at least one notch today, along with Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. More»

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

(NEWSER) - The Federal Housing Finance Agency—the agency behind Fannie Mae and Freddy Mac—has filed suit against more than a dozen big banks for their role in the mortgage meltdown mess. The feds, seeking billions in compensation, accuse the banks of misrepresenting the quality of mortgage securities, reports the New York Times . The suit accuses institutions including Bank of America, JPMorgan Chase, Goldman Sachs, and Deutsche Bank of failing to perform proper due diligence and missing evidence that borrowers’ incomes were inflated or falsified. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

3 More Wall Street Firms Agree to Buy Back Securities

Settlement reached after auction-rate securities market collapse

OTHER STORIES ON OUR RADAR

Citigroup • Goldman Sachs • Wachovia • Morgan Stanley • Deutsche Bank • UBS • Merrill Lynch • SEC • Andrew Cuomo • John Thain • auction-rate securities • JPMorgan Chase

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Moody's Slaps Wall Street's Big Banks With Review

Along with most of Europe's banks

Students Revolt Against Big Bank Recruiting

Protests spread across Ivy League campuses

SEC Letting Big Banks Skirt Fraud Penalties

'New York Times' analysis finds 350 instances of banks getting free passes

S&P Downgrades Credit Ratings of Top US Banks

Standard & Poor's applies new criteria to banks around the world

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

3 More Wall Street Firms Agree to Buy Back Securities

Settlement reached after auction-rate securities market collapse

Bookmark & Share

OTHER STORIES ON OUR RADAR

Citigroup • Goldman Sachs • Wachovia • Morgan Stanley • Deutsche Bank • UBS • Merrill Lynch • SEC • Andrew Cuomo • John Thain • auction-rate securities • JPMorgan Chase

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Moody's Slaps Wall Street's Big Banks With Review

Along with most of Europe's banks

Students Revolt Against Big Bank Recruiting

Protests spread across Ivy League campuses

SEC Letting Big Banks Skirt Fraud Penalties

'New York Times' analysis finds 350 instances of banks getting free passes

S&P Downgrades Credit Ratings of Top US Banks

Standard & Poor's applies new criteria to banks around the world

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?