Montana investors will receive more than $14 million as part of settlements Wachovia Securities LLC and Wachovia Capital Markets LLC agreed to in connection with investigations into the firms’ marketing of auction-rate securities.
The settlement calls for Montana investors to receive $14,033,000 to fully restore losses and liquidity from investments made in ARS through Wachovia, and for Wachovia to pay a $148,811.54 fine deposited into the state’s general fund, Montana auditor Monica Lindeen said Wednesday.
She credited a multi-state task force investigation into alleged misrepresentations made by Wachovia to its customers about the liquidity risk associated with auction-rate securities.
“The investigation and settlement with Wachovia was a well-coordinated, collaborative effort,” Lindeen said in a news release. “It’s a terrific example of efficient and effective enforcement work by state securities regulators.”
On Feb. 5, the Securities and Exchange Commission announced a settlement with Wachovia Securities that the regulator said would provide more than $7 billion in liquidity to thousands of customers around the country who invested in ARS before the market for those securities collapsed.
“Our settlement is separate and it’s a result of the North American Securities Administrators Association’s coordinated multi-state investigation into Wachovia’s offers and sales of these ARS to investors,” said Lindeen’s spokeswoman, Jessica Rhoades. “The fine we received is our prorata portion of the fine Wachovia agreed to pay to settle the multi-state investigation.”
