Banks Face Multi-State Probe on Auction-Rate Securities

Thursday, 7 Aug 2008 | 6:27 PM ET

A multi-state task force is probing a total of 12 Wall Street firms, including Citigroup , over how they handled clients' investments in auction rate paper, the Texas state securities commissioner said on Thursday.

Citigroup earlier on Thursday announced a $7 billion settlement with its auction rate investors.

To speed the investigations, each of the 12 states in the task force is taking the lead on one to two Wall Street firms, the Texas commissioner, Denise Voigt Crawford, said.

"I anticipate that some will settle very soon, it may be perhaps in the next couple of weeks," she said, declining to reveal any of the other companies' names.

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