NEW YORK, Aug. 19, 2008 (GLOBE NEWSWIRE) -- Attorney Advertising
The law firm of Bronstein, Gewirtz & Grossman, LLC announces that it is currently investigating the practices of investment banks and retail brokers who marketed auction rate securities to retail and institutional clients from April 2007 through February 12, 2008. In recent months, the New York Attorney General ("NYAG"), as well as several other state regulators, have launched investigations into the practices of investment banks with respect to their marketing of Auction Rate Securities.
On July 24, 2008, New York Attorney General Andrew M. Cuomo filed a complaint alleging civil fraud against UBS Securities LLC and UBS Financial Services, Inc. According to the complaint, UBS advertised Auction Rate Securities as liquid, cash equivalent investments to their clients. However, beginning in mid-2007, internal e-mails demonstrate that the auctions for such securities were in danger of failing and that UBS needed to purchase increasingly greater amounts of these securities in order to avoid auction failures. According the complaint, in late 2007, UBS executives encouraged its Wealth Management Division sales representatives to offload these securities to their clients in order to minimize UBS's own balance sheet exposure to these products. By February 12, 2008, most of these auctions had failed, when UBS ceased supporting the auctions with its own bids.
Similar allegations have been made by regulators against Merrill Lynch & Co. As part of a settlement relating to investigations commenced by the NYAG, a number of investment banks have agreed to buy back nearly $40 billion in auction rate securities. Firms participating in these buybacks include UBS AG, Citigroup, Inc., J.P. Morgan Chase & Co., Morgan Stanley, Merrill Lynch and Wachovia Corp. However, while these investment banks have agreed to reimburse their retail clients i.e., individuals and small businesses with accounts valued at less than $10 million, institutional and large corporate clients have been largely excluded from the buybacks.
Moreover, a number of investment banks and brokerage houses have not agreed to repurchase the illiquid Auction Rate Securities they sold to the public. Firms such as Goldman Sachs & Co., Raymond James Financial, Inc., Oppenheimer & Co., and Fidelity Investments have thus far refused to offer reimbursement to the majority of their customers.
If an investment bank or brokerage firm sold Auction Rate Securities to you between April 2007 and February 13, 2008 and you wish to discuss your legal alternatives, please contact either Peretz Bronstein or Eitan Kimelman of Bronstein Gewirtz & Grossman LLC at 212-697-6484 or via email at eitan@bgandg.com. Those who inquire by mail are encouraged to include their mailing address and telephone number.
Bronstein, Gerwitz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in securities litigation and arbitration, the firm's expertise includes general corporate work and private securities offerings.