Merrill Lynch next in Cuomo’s sights
New York Attorney General Andrew Cuomo will investigate Merrill's connection with the freezing of the ARS market.
New York Attorney General Andrew Cuomo will investigate Merrill Lynch & Co. Inc. in connection with the February collapse of the auction rate securities market, according to published reports.
Mr. Cuomo’s announcement of the investigation comes on the same day his office announced a settlement with St. Louis-based Wachovia Securities LLC regarding its sale of ARS, the interest rates on which change based on monthly auctions.
In a statement, Merrill Lynch said: “We were surprised that New York sent us a letter threatening legal action on auction rate securities. We have been discussing this issue with New York and other regulators since we announced last week our plan to purchase our retail clients’ ARS and we thought we were making progress. We anticipated further talks,”
Other investment banks that have settled ARS cases with Mr. Cuomo and other state regulators include Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co., all based in New York, and UBS AG, based in Zurich, Switzerland.
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