Massachusetts Secretary of State William Galvin has informed Bank of America that it must settle its pending auction-rate securities problems with Massachusetts or face legal action similar to those filed against UBS and Merrill Lynch in July. Galvin, who is part of a 12 state auction-rate securities task force, has told the bank that “Time is running out for discussions.” Bank of America had previously resolved certain issues with Massachusetts and Galvin when it agreed to redeem approximately $43 million of auction-rate securities sold to two Massachusetts state agencies.
Galvin’s action follows on the heels of earlier statements from New York Attorney General Andrew Cuomo’s office stating it was stepping up its probe of Bank of America. Cuomo, like Galvin, earlier filed an auction-rate securities case against UBS accusing it of fraud in connection with the sale of securities. It is expected that Cuomo will also file charges against Bank of America if it doesn’t settle with regulators.
It is expected that both regulators are demanding that Bank of America agree to a settlement similar to those previously agreed to by Merrill Lynch, UBS, Goldman Sachs, JP Morgan, Wachovia, Morgan Stanley, Deutsche Bank and Citigroup. Such settlements have generally required the firms to repurchase auction-rate securities sold to small investors (defined as individuals, charities and small businesses having $10 million or less in investments with the firm), reimburse such investors for losses they sustained if they sold their auction-rate securities, and use their best efforts to assist larger investors in liquidating their auction-rate securities.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and individual investors in auction-rate securities cases. For further information, please contact us.