More than a dozen investigations into the alleged miss-selling of auction rate securities by banks are planned by a US financial regulator.
The Securities and Exchange Commission (SEC) is to launch the probes, after investors claimed that they had been wrongly sold the financial products as “risk free”.
Major banks, including JPMorgan and Wachovia, have already been charged for the miss-selling by New York district attorney Andrew Cuomo – and have since settled by agreeing to mass buy-backs of the securities from customers.
However, these same firms could still be in trouble with the SEC, as its investigations are separate from those conducted in New York.
“We have over a dozen pending investigations under way – nobody is getting a pass,” says Christopher Cox, the watchdog’s chairman. “Secondary dealers, other primary dealers that aren’t part of the settlements are being investigated.”
The regulator will also investigate brokers, as well as banks.