Wachovia Corp. has confirmed that its Wachovia Securities LLC business and other affiliates have received inquiries from the SEC and state regulators regarding auction rate securities, according to a filing with the agency.
The Charlotte, N.C.-based bank said that regulators are looking for information related to the underwriting, sale and subsequent auction of municipal auction rate securities and auction rate preferred securities.
“Further review and inquiry is anticipated by the regulatory authorities, and Wachovia will cooperate fully,” the company said in a filing with the Securities and Exchange Commission.
Also, Wachovia said that it was named along with Wachovia Securities in a civil lawsuit filed in the U.S. District Court for the Southern District of New York.
The lawsuit seeks class action status for customers who purchased and continue to hold auction rate securities based upon alleged misrepresentations made with respect to the quality, risk and characteristics of the investments.
Wachovia said that it will “vigorously defend the civil litigation.”
The filing comes as New York Attorney General Andrew Cuomo and securities regulators in several states are conducting an investigation of the role that Wall Street firms played in promoting and marketing auction rate securities to investors (InvestmentNews, April 21).
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