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NY Sues Schwab Over ARS Sales

By Mark H. Astarita, Esq.

New York Attorney General Andrew Cuomo filed a lawsuit today against The Charles Schwab Corp., claiming the brokerage firm misled customers about the safety of auction rate securities ? and the firm is digging in for a fight.?The [attorney general?s] lawsuit casts blame for a bad situation in the wrong direction. Clients who purchased these products, and companies like Schwab that filled client orders, were misled by the major Wall Street underwriters who concealed the degree to which the auction rate securities market was so dependent on their support, Schwab spokeswoman Sarah Bulgatz wrote in an e-mail.On its face, this appears to be over-reaching by the AG. There is a flow to these cases, and the early cases were relatively easy for the regulators...continue to full post

Full post as published by SECLaw.com on August 17, 2009 (boomark / email).