Oppenheimer & Co. agreed to buy back from clients tens of millions of dollars of auction-rate securities under settlements with two states announced yesterday.The New York-based investment bank was accused by New York and Massachusetts of marketing ARS as safe, liquid alternatives to cash, without explaining the risks.

After ARS auctions began failing in droves two years ago, the securities became unsalable. Investors who thought they were playing it safe were trapped in illiquid investments.

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