From: Reuters
Securities regulators from six U.S. states mounted a surprise inspection Thursday of the headquarters of Wachovia Corp’s (WB.N: Quote, Profile, Research, Stock Buzz) brokerage affiliate, as part of a probe into the firm’s sales of auction-rate debt.The office of Missouri Secretary of State Robin Carnahan said a team of 10 regulators went to the St. Louis headquarters of Wachovia Securities, seeking information about sales practices, internal evaluations of the auction-rate securities market and marketing strategies.
The move came after Wachovia Securities failed to comply with information requests from Missouri securities regulators, state officials said. More than a dozen subpoenas were also issued, according to the state.
The $330 billion auction-rate securities market normally allows issuers such as municipalities to borrow money for the long term, but at lower, short-term rates.
Roughly half of the market remains frozen after a February meltdown in which brokerages abandoned their role as buyers of last resort. Investors flooded dealers with paper backed by bond insurers whose credit ratings were in question, forcing many issuers to pay uncommonly high interest rates.




Entries (RSS)