The Company self-disclosed to the SEC that Mellon Financial Markets LLC ("MFM") placed orders on behalf of issuers to purchase their own Auction Rate Securities. The SEC is conducting an investigation of those transactions. MFM is cooperating fully with the SEC in its investigation.
On Thursday, the SEC agreed to a preliminary settlement with financial firm Citigroup Global Markets, Inc. [corporate website; SEC press release] over the firm's auction-rate securities practices, and Friday the agency entered into a similar settlement with the firm UBS [corporate website; SEC press release]. UBS is also facing a lawsuit [complaint, PDF; JURIST report] filed late last month by New York Attorney General Andrew Cuomo [official profile] for allegedly misrepresenting auction-rate securities as low-risk despite the actual volatility of such investments. AP has more.
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