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Cuomo said the banks have and will continuew to provide liquidity to Last October, agreed to buy back as much as $4.7 billiomn in auction-rate securities it sold to about 5,500 investors, small businesses and small charities before the market collapsed in Februaryu 2008. According to the Securities andExchange Commission, the settlement also required BofA to “us e its best efforts” to provide up to $5 billiom in liquidity to businesses and institutional investorsw with accounts valued at $15 million or and charities with accounts valued at $25 million or more.
The agreement resolvex allegations that securities dealers made misrepresentations to customers during saleswof auction-rate securities about their safety and liquidity. Auction-rate securities have interest rates that are resetg at weekly or monthly auctionsz run byinvestment firms. The $330 billion marke collapsed last year, when investorsx became alarmed at the prospects of the ability of corporats borrowers covering debt servicd onthe securities. Many were left with securitiesd they could not sell intothe market. N.C.-based BofA (NYSE: BAC) neithet admitted nor denied wrongdoing. The SEC also has finalizesd a settlement with BofA overthe securities.
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