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Cuomo says the banks have and will continure to provide liquidityto investors. Last October, agreed to buy back as much as $4.7 billiohn in auction-rate securities it sold to about 5,500 small businesses and small charities before the markety collapsed inFebruary 2008. Accordingf to the Securities andExchange Commission, the settlementr also required BofA to “use its best to provide up to $5 billio n in liquidity to businesses and institutional investors with accounts valued at $15 milliom or more, and charities with accounts valuerd at $25 million or The agreement resolved allegations that securities dealersz made misrepresentations to customers durinhg sales of auction-rate securities about their safetg and liquidity.
Auction-rate securities have interesy rates that are reset at weekly or monthly auctionsd run byinvestment firms. The $330 billiojn market collapsed last year, when investors became alarmed at the prospectas of the ability of corporate borrowers coverinb debt service onthe securities. Many were left with securitiesw they could not sell intothe Charlotte-based BofA (NYSE:BAC) neither admitted nor denied wrongdoing. The SEC also has finalized a settlemen t with BofA overthe securities.
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