Citigroup has agreed to a settlement with the NY Attorny General's office that will see it buying back about $7.5 billion in securities from individual customers, charities and small businesses. This is good news for anyone still stuck with illiquid auction rate securities.
According to a Bloomberg article:
"Citigroup is the first Wall Street firm to settle federal claims amid a sweeping probe into how banks sold auction-rate securities before the $330 billion market collapsed in February. The accord may set a precedent for negotiations with firms including UBS AG, which has been named in civil complaints by Cuomo and authorities in Massachusetts.
``This is the first settlement in what is likely to be a number of settlements of the auction rate securities matters with all the major firms,'' Texas State Securities Commissioner Denise Voigt Crawford said. ``Firms that don't settle are going to be frowned upon by investors.''
All of this means more stress and writedowns at investment banks that have already been pounded by the credit crunch and the decline in the real estate market and real estate associated assets.
But the bottom line is that consumers who were stuck in these securities have more hope that they'll be able to get out.
Comments
Tim
August 08, 2008
I don't understand why they aren't going after Merrill Lynch and Co. These guys were just as much of criminals as UBS and Citibank.
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