So far, Citigroup, UBS and Merrill Lynch all have agreed to repurchase billions of dollars of the now-illiquid auction rate securities, and with New York Attorney General Andrew Cuomo’s vigilant pursuit of Wall Street investment banks for their mishandling of auction rate securities sales Goldman Sachs might be next on his list.

So far, Citigroup, UBS and Merrill Lynch all have agreed to repurchase billions of dollars of the now-illiquid auction rate securities, and with New York Attorney General Andrew Cuomo’s vigilant pursuit of Wall Street investment banks for their mishandling of auction rate securities sales Goldman Sachs might be next on his list.

Other firms are said to be close to reaching similar settlements with state and federal regulators. Goldman Sachs, however, has remained silent on the auction rate securities issue. As reported Aug. 14, 2008 in the Wall Street Journal, Goldman is a major player in the auction rate arena. Between 2003 and 2007, the firm was the No. 5 underwriter of the instruments.

When the auction rate market came to an abrupt halt in February, following an exit by Wall Street firms like Goldman Sachs which stopped serving as buyers of the last resort for the securities, investors were suddenly left holding illiquid securities. Some of those investors are Goldman Sachs clients, and they want to know what the company plans to do about their situation.

Goldman’s clients could be in for a long wait. Despite disclosing back in April that it had received requests from various governmental agencies and self regulatory organizations for information relating to auction products and recent auction failures, Goldman has so far refused to settle the matter and, according to the Wall Street Journal article, has no intention to buy back clients’ auction rate paper.

The Wall Street Journal cites the case of Carl Everett, a Goldman Sachs client who rates the service at Goldman as top of the line - until now. Everett apparently has money tied up in auction rate securities, and faces the same situation as thousands of other investors: stuck with illiquid investments. Recent settlements by investment banks like Citigroup and UBS to resolve the matter focused on small investors, leaving wealthier investors like Everett, institutional clients and corporate buyers of auction rate securities out of the picture thus far. Everett says that on Aug. 9, 2008 he was told by Goldman Sachs that the company would not be buying back his auction rate securities.

“That’s disappointing to me - my expectation is high for the Goldman Sachs brand”, said Everett in the Wall Street Journal article. My expectation for that is they would honor their position and statement of these securities as cash and cash equivalents’. With Wall Street’s image already tattered and tarnished - some say beyond repair - Goldman Sachs might want to rethink its position in the days ahead.