Entries in auction rate securities (1)


Auction rate securities: two noteworthy stories 

TD Ameritrade Settles Securities Case

"TD Ameritrade Inc. agreed to buy back $456 million of auction-rate securities from its clients as part of a settlement with New York Attorney General Andrew Cuomo, the Securities and Exchange Commission and Pennsylvania securities regulators.

The online brokerage intends to return the money to customers across the country -- including individuals, charities, nonprofit entities and businesses by March 2010 but could need until June 30 to complete the buybacks.

Auction-rate securities, short-term debt instruments whose prices reset in periodic auctions, caused billions in losses for investors after the $330 billion market collapsed in early 2008.

Over the past year, regulators have reached settlement agreements with several Wall Street firms and brokerage houses, which have agreed to buy back over $60 billion of the securities from investors..."

source: 7/20/09 Wall Street Journal


Cuomo Says Schwab Faces Fraud Suit

" In an official notice sent to Charles Schwab & Co. Friday, Attorney General Andrew Cuomo warned that his office plans to sue the largest online brokerage firm for civil fraud over its marketing and sales of auction-rate securities to clients. Emails and testimony cited in the letter show Schwab's brokers had little idea of what they were selling and later failed to tell clients that the market was collapsing...Charles Schwab executives received daily reports showing in the fall of 2007 that demand for the instruments was declining rapidly, but it didn't make that information available to clients, said the letter."

source: 7/20/09 Wall Street Journal