Three big banks settle with NY state over ARS
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Thu, 21 Aug 2008 21:42:51 GMT |
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NEW YORK (Reuters) - New York Attorney General Andrew Cuomo on Thursday said Merrill Lynch & Co Inc , Deutsche Bank and Goldman Sachs have agreed to settlements regarding their auction rate security sales practices.All three banks agreed to pay fines and buy back securities from retail investors, who were left holding the difficult-to-sell notes earlier this year when the auction rate market failed.Cuomo said Merrill Lynch's settlement is separate from an agreement the bank made earlier on Thursday with Massachusetts' top securities regulator, William Galvin.As part of the New York settlement, Merrill will pay a fine of $125 million and will buy back securities from investors whose net worth is under $4 million starting October 15. About $10 billion in securities are involved. The bank agreed to complete the buyback by January 2.Goldman Sachs will pay a $22.5 million fine and buy back about $1.5 billion in auction rate notes, while Deutsche Bank will pay a $15 million penalty and buy back about $1 billion of the notes.Cuomo said Merrill's penalty and the terms of the settlement took into account evidence of conflicted research at the bank."Part of our theory on the case dealt with Merrill's research," he said.(Reporting by Elinor Comlay; Editing by Gary Hill)
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