Cox: ‘Nobody getting a pass’ on ARS mess

The SEC chairman said investigations will go beyond the banks and include the brokerages that sold the investments.
AUG 20, 2008
Securities and Exchange Commission Chairman Christopher L. Cox said investigations into the February collapse of the $330 billion auction rate securities market go beyond the banks that created the investment vehicles and include the brokerages that sold the investments. “Nobody is getting a pass, other primary dealers that aren’t part of the settlements are being investigated,” he said. “Normally, this sort of investigation would take years,” Mr. Cox said at a news conference in Washington yesterday. He added that “over a dozen pending investigations are under way.” On Aug. 15, New York State Attorney General Andrew Cuomo said that he will be targeting brokerages, including units of Boston-based Fidelity Investments and Charles Schwab Corp. of San Francisco (Investment News, August 18). In recent weeks, investigations by securities regulators have led New York-based companies Citigroup Inc., JPMorgan Chase & Co., Merrill Lynch & Co. Inc. and Morgan Stanley, along with UBS AG of Zurich, Switzerland, to repurchase approximately $51.7 billion of the troubled securities.

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