Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, February 24, 2010

Oppenheimer Agrees to Buy Back ARSs in New York Settlement

The New York AG has been aggressive in getting securities firms to settle auction rate securities investigations, and today Oppenheimer & Co. did so, agreeing to buy back from investors $31 million in ARSs. As in the previous settlements, eligible investors include individuals, charities, non-profits, and small businesses and institutions. Since the value of its customers’ frozen auction rate securities exceeds the resources Oppenheimer can presently pledge to a buy-back offer under regulatory requirements, Oppenheimer has committed to extending additional buy-back offers as soon as it obtains additional capital or access to credit. The Attorney General retains the right to charge Oppenheimer under New York’s Martin Act should it determine that Oppenheimer’s future efforts are insufficient.

All individuals, charities, and small businesses with accounts of less than $1 million at Oppenheimer will be eligible for $25,000 in liquidity.

In addition to Oppenheimer, the other firms that have agreed to buy-backs to date as part of the Attorney General’s investigation are Banc of America Securities LLC and Banc of America Investment Services, Inc.; Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC; Deutsche Bank Securities Inc.; Fidelity Investments; Goldman Sachs & Co.; JPMorgan Chase & Co.; Merrill Lynch; Pierce, Fenner & Smith Inc.; Morgan Stanley & Co. Inc. and RBC Capital Markets Corporation; TD Ameritrade, Inc.; UBS Securities LLC and UBS Financial Services, Inc.; and Wachovia Securities LLC and Wachovia Capital Markets Inc.

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