Both The Wall Street Journal and The New York Times have reported that New York Attorney General Andrew Cuomo’s office has reached an agreement with Fidelity Investments to resolve problems over Fidelity’s marketing of auction-rate securities. According to sources familiar with the negotiations, Fidelity will apparently repurchase approximately $300 million of auction-rate securities from its customers. It is anticipated that the settlement will be similar to other settlements previously entered into and will be limited to small investors (defined as retail customers, charitable organizations and small businesses holding $10 million or less in investments at the firm).
Fidelity’s accord with the New York State Attorney General marks a significant breakthrough in consummation of additional settlements with other brokerage firms that were not involved with the underwriting of auction-rate securities. Previously, many distributing firms have resisted the prospect of buying back auction-rate securities that they marketed but which they did not underwrite. In fact, many of the distributing brokerage firms have asserted that they, themselves, were mislead by the underwriting firms.
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.