NEW YORK, July 17, 2008 (PRIME NEWSWIRE) -- The Securities Law Firm of Klayman & Toskes, P.A. (http://www.nasd-law.com) said today that several states paid a surprise visit to Wachovia's (NYSE:WB) St. Louis Headquarters seeking to conduct interviews and obtain documents regarding the Brokerage Firm's sales and marketing practices of Auction Rate Securities. All of the state regulators are members of the North American Securities Administrators Association. The inspection of Wachovia's offices comes about 20 days after Massachusetts filed civil fraud charges against UBS in connection with its sales of Auction Rate Securities.
According to news reports, the Missouri Securities Division had initiated an investigation of Wachovia in April of 2008, requesting information and records relating to its sales of Auction Rate Securities. Reportedly, however, Wachovia did not fully respond to the inquires it received, which led to the visit by securities regulators. According to Karen Tyler, the President of the North American Securities Administrators Association, "Our focus is to determine what conduct took place at the point of sale -- what was potentially misrepresented and omitted -- and our goal is securing for investors access to their cash as requested. If the product was represented to be a cash equivalent going in, it must be treated as a cash equivalent coming out."
Individual securities arbitration claims as well as a class action lawsuit, case no. 08-CV-02913, have also been filed against Wachovia. Since Klayman & Toskes initially announced its investigation of Auction Rate Securities in February 2008, the Law Firm has received numerous inquires from purchasers of Auction Rate Securities and have filed numerous arbitration claims with the Financial Industry Regulatory Authority's ("FINRA") Office of Dispute Resolution. Many brokerage firms marketed Auction Rate Securities to be "safe", "liquid" investments that were akin to money market funds. However, since the week of February 11, 2008, many auctions have failed and the clients' investments have become illiquid as buyers have become scarce. As a result, many investors no longer have access to their money which was placed in Auction Rate Securities.
Some investors have been able to sell their Auction Rate Securities on the secondary markets. However, these sales have often been achieved at deep discounts from the original purchase price of the securities. As such, those investors who have been able to sell would potentially have a claim for the reduction in the value of their securities. The arbitration claims presently being filed by Klayman & Toskes seek damages as a result of brokerage firms' misrepresentations and omissions, breach of fiduciary duty, breach of contract, fraud, constructive fraud, negligence and gross negligence, violation of NASD and NYSE rules, violation of state securities laws, and violation of The Securities Exchange Act of 1934.
The attorneys at the Law Firm of Klayman & Toskes are dedicated to aggressively pursuing claims on behalf of investors whose investments in Auction Rate Securities have become frozen. Klayman & Toskes, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
If you have money frozen in Auction Rate Securities or have information relevant to our claims, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956, or visit us on the web at http://www.nasd-law.com.