According to an August 15, 2008 InvestmentNews article, the brokerage and capital markets divisions of Wachovia Corp. have agreed to repurchase $8.8 billion in auction rate securities. The agreements, like those reached with Merrill Lynch, UBS, Citigroup, Morgan Stanley and JP Morgan Chase, came after investigations by state regulators into the sales practices surrounding these securities. Billions of investor dollars have been frozen since the market for ARS collapsed in February.
Wachovia Securities LLC, the bank’s brokerage division, and Wachovia Capital Markets LLC of Charlotte, N.C., have also agreed to $50 million in fines to be distributed among the effected states.
Under the proposed settlement, Wachovia will offer to repurchase roughly
$5.7 billion of ARS held by individual investors, small businesses and charitable organizations and $3.1 billion of ARS held by other investors.
Following the announcement, Wachovia shares fell 12 cents to $15.69.
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