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MONDAY, NOVEMBER 23, 2009
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3 More Wall Street Firms Agree to Buy Back Securities

Settlement reached after auction-rate securities market collapse

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