Citigroup Will Buy Back $7B of Bad Debt, Pay $100M Fine

Settlement reached after auction-rate securities market collapse

(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. More»

Ex-auto czar vows to fight it

(NEWSER) - Talk about timing. On the same day that Steve Rattner got to trumpet GM’s new IPO , Andrew Cuomo filed a trio of lawsuits against the ex-auto czar related to a pay-to-play scandal involving New York’s pension fund. Cuomo’s asking for $26 million in damages, and a lifetime ban on Rattner in the securities industry, Fortune reports. At the same time, the SEC revealed details of a $6.8 million settlement Rattner had agreed to over the same case. More»

(NEWSER) - The New York attorney general has told Charles Schwab he will sue the brokerage for civil fraud over its marketing of securities to clients, reports the Wall Street Journal. Andrew Cuomo alleges that Schwab's brokers had little understanding of the financial instruments and then failed to inform clients that the market for them had tanked. One broker cited by the AG said, "On whatever measuring scale my knowledge was pretty low." More»

'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»

They're near deal to settle allegations on mortgage-bond deals

(NEWSER) - A number of top Wall Street banks are on the verge of settling fraud allegations with the SEC for the mortgage-bond shenanigans that led to the financial crisis, sources tell the Wall Street Journal . The cases are being handled individually, since each bank faces substantially different charges, with the first settlement expected as soon as next week. They represent regulators’ biggest attempt so far to hold Wall Street accountable for the crisis. More»