Bank of America Agrees to Pay $4.7 Billion
Bank of America Corp. has agreed to buy back as much as $4.7 billion in auction-rate securities as part of a settlement announced Wednesday.
According to the Securities and Exchange Commission, the settlement would cover about 5,500 investors, small business and charities left holding the frozen investments when the market collapsed in February.
Bank of America reached the settlement with the SEC, the New York attorney general’s office and a coalition of state regulators. The agreement resolves the government agencies’ claim that BOA lied to its customers when it told them that auction-rate securities were as safe as cash.
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.
On July 17, Carey & Danis filed a class action lawsuit in the U.S. District Court for the Southern District of Illinois on behalf of persons who purchased auction rate securities from Bank of America Corp. (NYSE: BAC), Bank of America Investement Services, Inc. and Bank of America Securities, LLC between June 11, 2003 and Feb. 13, 2008 and who continued to hold the securities as of Feb. 13, 2008.
Auction-rate securities investors who wish to discuss their rights against any broker-dealer may contact Carey & Danis toll-free at 800-721-2519 or fill out our online contact form
