Cuomo To Probe Fidelity, Goldman On Securities

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

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.

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.


The New York Sun

© 2024 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use