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Mutual Funds - Mutual Funds.
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Posted by Monitor on August 22, 2008, 1:33 am
Market News: Merrill, Goldman, Deutsche Agree to Buy Back Auction-Rate
Debt
Aug. 22 (Bloomberg) -- Merrill Lynch & Co., Goldman Sachs Group Inc.
and Deutsche Bank AG agreed to pay $160 million in fines and buy back
as much as $15 billion in failed auction-rate securities, settling
probes by state regulators.
The accords bring to eight the number of firms that settled claims in
the last two weeks that they misled investors by fraudulently
marketing the long-term securities as easy to buy and sell. Merrill,
among the biggest underwriters of the debt, will redeem up to $12
billion and pay fines of $125 million, the second-largest penalty to
date from the probes.
``It's been a great day of progress,'' said New York Attorney General
Andrew Cuomo, who announced the agreements this afternoon. Merrill
Chief Executive Officer John Thain, who took part in talks that led to
yesterday's agreement, knew his firm had to ``step up to the plate,''
Cuomo said.
Wall Street banks are settling claims stemming from a nationwide
investigation into allegations banks peddled auction- rate securities
as investments that were as liquid as cash. The $330 billion market
seized up in February, when the credit crisis prompted banks to stop
supporting the periodic auctions at which the long-term securities
were bought and sold.
Goldman will buy back $1.5 billion of the securities and pay a $22.5
million fine, Cuomo said. Deutsche Bank will redeem $1 billion of debt
and was fined $15 million. Merrill, which offered on Aug. 7 to buy
back $10 billion of debt starting in January, will now start buying it
in October.
http://www.bloomberg.com/apps/news?pid=20601100&sid=aWhYCrt_9SLc&refer=germany
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