Goldman Sachs has already agreed to buy back about $1.5 billion in auction rate securities held by customers and pay a $22.5 million fine. But the New York Attorney General is still looking into the bank regarding the ARS market. The AP reports that Andrew Cuomo's office is probing whether Fidelity Investments was given various incentives to sell ARSs underwritten by Goldman Sachs in the form of other services. If so, it could well be interpreted as a disclosure issue. This is not unlike advisers hawking mutual funds from companies with which the adviser's firm had a marketing relationship with big-time incentives--a clear no-no. There is some intrigue given that Fidelity had received a letter from Massachusetts' top securities regulator urging the firm to buy back frozen auction-rate securities. Fidelity apparently left the door open to "possibly being helpful on the auction-rate securities matter," William Galvin, secretary of the commonwealth, said.

For more:
- here's the AP article

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