- Citigroup Lost $20 Million on Facebook IPO Trades
- Sticker Shock: What College Is Likely to Cost in 18 Years
- JPMorgan to Shake Up Risk Team After Big Loss: Report
- Icahn Raises Stake in Chesapeake, Wants Board Seats
- Marc Faber: Chance of Global Recession Is Now 100%
- Week Ahead: Europe Has Wall Street Bull on Short Leash
- What Happened to Stocks? Most Unloved in 50 Years
- Cool Jobs: From Gold Stacker to Bed Tester
- Many Greeks Moved Their Money Abroad Long Ago
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
MOST SHARED
- Marc Faber: 100% Chance of Global Recession
- Zero China Growth Is ‘Probable’: Gordon Chang
- Time for Flash Sales to Adapt or Die
- Citigroup Lost $20 Million on Facebook IPO Trades
- 5 Spots Where the Dollar Buys a Great Vacation
- Facebook: The Song — Yes, We're Serious
- How to Trade on the Jobs Report
- China Growth Risks Signal Need for Fiscal Action
- What College Tuition Will Look Like in 18 Years
MOST POPULAR
HOT ON FACEBOOK
New York Bank Probe Not Over Yet: Cuomo's Office
Text Size 
On-Air Editor
Some big Wall Street banks may have been premature in believing New York State's investigation into auction-rate securities was over, people inside New York Attorney General Andrew Cuomo's office told CNBC.
In fact, the investigation is continuing and includes firms like JP Morgan Chase [JPM
Loading...
()
], Goldman Sachs [GS
Loading...
()
] and Lehman Brothers [LEH
Loading...
()
], these people say.
The probe, however, is largely focused on three firms: Merrill Lynch [MER
Loading...
()
], Wachovia [WB
Loading...
()
] and to a lesser extent Morgan Stanley [MS
Loading...
()
].
State and federal regulators have been investigating whether brokerages and banks falsely told clients that auction-rate securities—a $330 billion market of long-term debt instruments that pay yields reset through weekly or monthly auctions—were as safe and liquid as cash.
Watch the video at left for more details of the Cuomo investigation.
Both JP Morgan and Merrill announced plans to pay back investors who bought illiquid auction rate securities at par, but the firms announced this plan before Cuomo concluded his investigation into the firms' conduct. Cuomo also believes both the Morgan Stanley and Merrill Lynch settlements are inadequate.
Specifically, he says that neither addresses the issue of damages—or making people whole who already sold their auction rate securities at less than par because the firms wouldn't make good on their promise to hold auctions and the market declined.
Cuomo wants these investors to be made whole as well. In addition, Cuomo wants all deals to include some sort of restitution for institutional investors.
The current focus of most of the settlements has been the smaller so called "retail" investor, but Cuomo believes large investors were misled as well and deserve something in return.
The Wall Street firms counter that Cuomo is simply looking for his own "Spitzer Moment"—referring to the former attorney general who made his name holding lavish press conferences. They contend Cuomo is looking for publicity and the early settlements deprived him of a media event.
People at Morgan point out, for instance, that they have agreed to pay damages to investors who sold their auction-rate securities at a loss.
- The Nasdaq has suffered the most from the EU crisis showing there's risk in the usual tech stocks.
- Targeting more Millennials is just one of the items brewing for consumers in the world of spirits.
- It seems many people may need a reminder of how NOT to act on a plane. Here are a few tips.
- Here are some very unusual roadside stops along American highways that might peek your interest.
- How three generations of Americans are dealing with the finances of retirement.
Data is a real-time snapshot *Data is delayed at least 15 minutes
