Bank of America says ready to settle on auction rates
|
|
|
By Joseph A. Giannone and Jonathan StempelNEW YORK (Reuters) - Bank of America Corp , said it is ready to settle federal and state probes into the marketing of auction-rate securities, joining eight other companies that reached agreements.The bank said it has been in talks for nearly a month with the U.S. Securities and Exchange Commission and regulators in New York and Massachusetts on a resolution that would provide "liquidity relief" to customers hurt when the $330 billion market seized up in February."We are ready and willing to enter into an agreement that follows the same basic terms of previously announced settlements," bank spokeswoman Shirley Norton said in a statement Thursday. "We understood that we had reached such an agreement in principle nearly two weeks ago."A spokesman for New York Attorney General Andrew Cuomo said on Friday that no deal was set yet. "Our investigation into Bank of America is ongoing," said the spokesman, Alex Detrick."We are still seeking answers to certain questions that have arisen as a result of our initial inquiries. Hopefully, a settlement will be in reach once we have obtained all the relevant information."Cuomo was expected to send subpoenas to several Bank of America officials this week, a person familiar with his investigation said earlier this week.Massachusetts Secretary of State William Galvin threatened on Wednesday to sue Bank of America, saying his office had been unable to settle with the Charlotte, North Carolina-based bank.Auction-rate debt has rates that reset in periodic auctions. Regulators say brokerages misled investors into believing the debt was safe and the equivalent of cash.But after the market seized up, tens of thousands of investors could not sell the debt or could only sell it at a loss, according to regulators.Citigroup Inc , Deutsche Bank AG , Goldman Sachs Group Inc , JPMorgan Chase & Co , Merrill Lynch & Co , Morgan Stanley , UBS AG and Wachovia Corp have settled regulatory allegations tied to how auction-rate debt was sold.The eight companies agreed to buy back more than $44 billion of the securities and pay in excess of $520 million of fines and penalties.A 12-state task force is also examining auction-rate practices in the industry.On Wednesday, federal prosecutors charged two former Credit Suisse Group AG brokers with fraud and conspiracy over the sale of subprime debt tied to auction-rate securities. One of the brokers pleaded innocent, while the FBI took the other into custody Thursday to face charges.Bank of America shares closed Thursday at $30.60 on the New York Stock Exchange. They began the year at $41.26.(Editing by Jeffrey Benkoe)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
EXTRA: US consumer confidence up slightly in November
Washington - Consumer confidence in the United States rose slightly in November after two straight months of declines, according to a private research group Tuesday, reflecting cautious optimism as the country recovers from a deep recession. The New ...
US economy grew 2.8 per cent in third quarter - 2nd Update
Washington - The US economy grew at an annual rate of 2.8 per cent in the third quarter of this year, according to an updated government estimate Tuesday that confirmed the United States has likely emerged from its deepest recession in decades. The f...
US economy grew 2.8 per cent in third quarter - Update
Washington - The US economy grew at an annual rate of 2.8 per cent in the third quarter of this year, according to an updated government estimate Tuesday that confirmed the United States has likely emerged from its deepest recession in decades. The f...
US economy grew 2.8 per cent in third quarter
Washington - The US economy grew at an annual rate of 2.8 per cent in the third quarter of this year, according to an updated government estimate Tuesday, confirming that the world's largest economy has likely emerged from its deepest recession in de...
HP sees 'encouraging signs of recovery,' profit climbs 14 per cent
San Francisco - The world's biggest computer maker Hewlett Packard said Monday that it saw encouraging signs of recovery as its quarterly earnings rose 14 per cent. The Silicon Valley company said it earned 2.4 billion dollars in the quarter, up fr...
US stocks gain on surprise home sales recovery
New York - US stocks surged Monday after the release of some surprisingly buoyant data on home sales. Existing home sales surged to 6.1 million units in October, the highest annualized rate since February 2007 and up 10.1 per cent from September, acc...
Report: Microsoft and News Corp in search pact talks
San Francisco - Microsoft and News Corp are in advanced negotiations that would see the media conglomerate's content removed from Google's search index and appear exclusively via Microsoft's Bing search engine, the Financial Times reported Monday. Ne...
|
|
|
|
|
|
|
|
