Wachovia Added to Auction-Rate Securities Probe
Wachovia Securities has received subpoenas and inquires from federal and state regulators probing the auction-rate securities market.
The information was disclosed to investors in a Wachovia filing with the Securities and Exchange Commission on May 12.
According to the filing, the SEC and several state regulators have requested information concerning the underwriting, sale and subsequent auctions of municipal auction-rate securities and auction-rate preferred securities. Wachovia admitted that it fully anticipates further investigation.
The company also informed investors that it has been named as a defendant in an auction-rate securities class action lawsuit.
Auction-rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.
In mid-February, the auctions for the investment instruments failed. That meant investors were unable to sell their securities. To this day, auction-rate securities investors find themselves owning frozen assets.
If you hold auction-rate securities, contact Carey & Danis.
For more information, fill out our online contact form or call Carey & Danis toll-free at 800-721-2519.
