SEC Investigates Wachovia's ARS Practices

Wachovia disclosed that the SEC and other regulators are seeking information about the underwriting, sale, and auctions of municipal auction-rate securities and auction-rate preferred securities.  In addition, a lawsuit was filed in March in New York by customers who purchased ARS alleging misrepresentations about the quality and risk of the securities.  Wachovia's CEO said the company hired a consultant to review its financial controls and risk management practices.  NYTimes, Wachovia Faces S.E.C. Inquiry Over Auction-Rate Securities.