Cuomo To Probe Fidelity, Goldman On Securities
The New York attorney general's office said yesterday it is investigating whether Fidelity Investments was given incentives by Goldman Sachs Group Inc. to sell auction-rate securities to investors.
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Attorney General Andrew M. Cuomo speaks at a press conference discussing the amendment of the Piracy Protection Act at the New York State Attorney General's office May 5, 2008 at New York City.
Investigators are examining if Fidelity pitched auction-rate securities that were underwritten by Goldman Sachs because it received other services from the investment bank. A spokesman for Attorney General Cuomo confirmed the investigation, but declined to provide further details.
A spokesman for Goldman Sachs declined to comment. Fidelity did not immediately return telephone calls. Mr. Cuomo is leading an investigation into how major Wall Street investment banks and smaller financial companies pitched auction-rate securities to customers.
The securities were marketed as being as safe as cash until the market froze up amid the credit crisis, causing investors to lose money.
Mr. Cuomo, leading the investigation on behalf of state and federal authorities, has gotten investment banks to agree to buy back more than $50 billion worth of auction-rate securities from eight global banks.
Goldman Sachs agreed to buy back about $1.5 billion in securities still held by private clients that were purchased through the firm before February 11. It also agreed to pay a $22.5 million fine.
