Cox: ‘Nobody getting a pass’ on ARS mess

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.