Securities Regulators Arrive At Wachovia Securities Headquarters to Conduct Auction-Rate Securities Investigation

In St. Louis, Missouri, 10 securities regulators probing the auction-rate securities crisis arrived at Wachovia Securities today. The firm has reportedly failed to fully comply with requests related to the investigation, which is what prompted the onsite visit.

The investigators, from Missouri, Massachusetts, New Jersey, Illinois, Pennsylvania, and other US states, arrived to conduct interviews and demand documents regarding Wachovia’s marketing and sales practices.

The Missouri Securities Division investigation into Wachovia Securities began last April, and the office of Missouri Secretary of State Robert Carnahan has subpoenaed over a dozen Wachovia Securities executives and agents in search of more information related to the company’s auction-rate securities business. Carnahan says that hundreds of Missouri investors have contacted her office frustrated that they cannot access their money.

The Missouri Securities Division says it has received more than 70 formal complaints over the last 70 months from investors that believe they were misled when they bought auction-rate securities.

The Securities and Exchange Commission is also seeking information from the investment firm. Nationally, Wachovia has been hit by a class action lawsuit and a number of arbitration claims. Many investors say they were told that the securities they were purchasing were “equivalent to cash or money market funds.” The investors say that Wachovia knew but did not reveal key facts about the market to them.

No charges have been filed so far against Wachovia Securities.

In the last year, Wachovia Corp’s stock has dropped 80%. The company is expected to report a $2.6 to $2.8 billion loss for the second quarter.

If you cannot access your money because a broker-dealer told you to invest in the auction-securities market and that the securities were “equivalent to cash,” Shepherd Smith Edwards & Kantas LTD LLP would like to talk to you. Contact our stockbroker fraud law firm today.

Mo. regulators investigate St. Louis Wachovia Securities headquarters, St. Louis Business Journal, July 17, 2008
Wachovia Inspected by States Over Auction-Rate Sales,, July 17, 2008
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