Wachovia Settles Securities Probe
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Wachovia Corp. has agreed to buy back $8.5 billion in auction-rate securities as part of a wide-ranging investigation by the New York Attorney General and other state regulators into the collapse of the market.
The Charlotte, N.C.-based bank will also pay $50 million in fines to be distributed among states.
Wachovia is the fifth bank to agree to repurchase the troubled securities over the past two weeks, following Citigroup Inc., UBS AG, JPMorgan Chase & Co., and Morgan Stanley.
Auction-rate securities are investments that resembled corporate debt, but their interest rates were reset at regular auctions.
The market for the securities collapsed in February amid deterioration in the broader credit markets.