According to an August 1, 2008 Dow Jones Newswire, New York State Attorney General Andrew Cuomo said Friday he intends to take legal action against Citigroup Inc. for their marketing and sales of auction-rate securities.
According to Cuomo’s office, Citigroup “repeatedly and persistently” made material misrepresentations and omissions in its underwriting, distribution and sale of auction-rate securities.
Citigroup represented that auction-rate securities were safe, liquid, and cash-equivalent securities,” wrote David A. Markowitz, chief of Cuomo’s Investor Protection Unit. “These representations were false, and had a severe detrimental impact on tens of thousands of Citigroup customers.”
Citigroup would become the third major Wall Street company to face legal action over its sales of auction-rate securities in recent weeks.
Last week, Cuomo sued UBS AG (UBS) alleging similar misrepresentations to clients regarding the risks of auction-rate securities. In a similar action, Massachusetts regulators filed charges against UBS in June.
On July 31, 2008, Massachusetts regulators filed a civil-fraud complaint against Merrill Lynch & Co. for allegedly misrepresenting the nature of the securities to investors and for co-opting its “supposedly independent” research analysts to help them reduce its own inventory of the securities.
The attorneys at Colling, Gilbert, Wright & Carter are actively pursuing and litigating Auction Rate Securities (ARS) cases for arbitration and recovery of investor losses. If you own or have owned an ARS and have suffered a loss or cannot access your money, please call or email our offices for a free case evaluation.