Wachovia has announced that its securities unit has received subpoenas from the SEC and various state regulators regarding its auction-rate securities practices.
Recently, state securities regulators have also began focusing on the auction-rate problem and are coordinating their efforts to help investors “who can’t access funds that their brokers placed in these complex investment products” according to an article by Kevin Kingsbury in The Wall Street Journal. North Dakota Securities Commissioner Karen Tyler, the president of the North American Securities Administrators Association, said “If violations are uncovered, then state securities regulators will seek appropriate remedies, including a much stronger commitment from Wall Street to provide their retail clients with an acceptable solution.”
State investigations are being handled by each state individually but are being coordinated through a task force headed by Bryan Lantagne, the head of the Massachusetts Securities Division. The other states involved include Florida, Georgia, Illinois, Missouri, New Hampshire, New Jersey, Texas, and Washington.
According to Tyler, “Our focus is to determine what conduct took place at the point of sale – what was potentially misrepresented and omitted – and our goal is securing for investors access to their cash as requested. If the product was represented to be a cash equivalent going in, it must be treated as a cash equivalent coming out.”
No one knows whether these efforts by the SEC and the states will force broker-dealers to inject needed liquidity into the auction-rate markets or otherwise correct the rampant abuses that were associated with the sales of these securities.
No comments:
Post a Comment