Auction Rate Securities Fraud Attorney

ARS Investigations Spread to Mid-Size Brokerages

It hasn’t taken New York Attorney General Andrew Cuomo much time to come through for investors on a promise to investigate all brokerages, no matter their size, that might be involved in auction-rate securities fraud. The Financial Industry Regulatory Authority recently announced that their investigators will now turn their attention to the smaller brokerages that may be responsible for part of the $60 billion in auction-rate securities debt that has been estimated to be held by investors.

Large firms, such as Morgan Stanley and Citigroup, have already agreed to repurchase close to $50 billion of the auction-rate securities debt, leaving around $10 billion of debt still remaining. Cuomo believes that smaller brokerages are responsible for the financial suffering of many investors and intends to force them to repurchase failed auction-rates securities debt just as their larger counterparts have.

The inspections will begin on August 25, 2008, and will attempt to determine whether or not these smaller brokerages were aware of the serious problems plaguing the auction-rate securities market and whether or not they attempted to warn investors of the potential risks. One of Cuomo’s assistants, Benjamin Lawsky, has noted that these investigations have “already begun to uncover some disturbing facts that seem to belie the innocent picture of the downstream brokerages.”

Investors that have suffered financial damages are urged to seek the counsel of an experienced auction rate securities fraud lawyer. To schedule your initial consultation with a skilled ARS lawyer, contact the auction rate securities fraud lawyers of Williams Kherkher by calling 800-220-9341.