States gets aggressive on auction rates securities

States are getting busy when it comes to auction rate securities. Missouri raided the St. Louis office of Wachovia Securities in its probe. New York Attorney General Andrew Cuomo has charged UBS with illegally promoting auction rate securities as safe investments when executives knew they were anything but. Now Massachusetts has gotten in on the act: It similarly charged Merrill Lynch with promoting auction rate securities as much safer than they were, the AP reports. Once again, email forms the main evidence. One from a Merrill Lynch executive in November read, "Market is collapsing. No more $2k dinners at CRU." Interestingly, the complaint also charges that Merrill Lynch somehow got its research department in on the act, allowing the sales staff to push for research that would endorse "the safety and high quality" of auction-rate securities. Sleazy if true.

For more:
- here's the AP article

Related Articles:
A way to end the auction rate securities mess?
Auction rate securities frozen