Thursday, September 18, 2008
FINRA announced that it has reached agreements in principle with SunTrust Investment Services, Inc. and SunTrust Robinson Humphrey, Inc., both of Atlanta, GA, Comerica Securities, Inc. of Detroit, MI, First Southwest Company of Dallas, TX, and WaMu Investments, Inc., of Irvine, CA, to settle charges relating to the sale of Auction Rate Securities (ARS). Each firm has agreed to offer to repurchase at par ARS that were purchased by individual investors and some institutions between May 31, 2006, and Feb. 28, 2008. A total of more than $1.8 billion of ARS are eligible for repurchase. The firms have also agreed to make whole individual investors who sold ARS below par after Feb. 28, 2008. The firms will pay a total of $3.25 million in fines, with individual fines ranging from $250,000 to $1.65 million.
Each firm has also agreed to have an independent, non-industry arbitrator resolve investor claims for any consequential damages - that is, damages they may have suffered from their inability to access funds invested in ARS.