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Regulatory Actions around Auction Rate SecuritiesSubmitted by: Marc Siegel, Head of Accounting Research and Analysis

As we?ve seen over the past week, several of the large banks have begun to announce plans to make whole the retail and institutional investors in auction rate securities. Some of these announcements have resulted from regulatory action while some companies are attempting to preempt regulatory action by entering into voluntary programs. Details around the regulatory actions precipitating the announcement by banks are highlighted in a recent article by Mondaq Business News. Specifically, the story discusses the Securities and Exchange Commission?s announcement last week to settle with Citigroup Global Markets, UBS Securities and UBS Financial Services to repurchase auction rate securities of retail investors in the near term and use best efforts to repurchase at par the securities of institutional investors by the end of 2009 or 2010. Additional news about auction rate securities and other big banks can be seen here. The New York Attorney General has indicated he may still pursue other avenues of investigation with respect to auction rate securities.

Given the federal and state regulator?s views on auction rate securities, we?re likely to hear more actions in the months ahead. Please let us know your thoughts on the auction rate securities situation.

Full post as published by Institutional Shareholder Services -- Corporate Governance Blog on August 13, 2008 (boomark / email).