Thursday, August 7, 2008

Bank of America Receives Subpoenas Relating To Its Sale of Auction-Rate Securities

Bank of America Corp. reported today that it has received subpoenas and requests for information from various state and federal regulators regarding its sale of auction-rate securities.

Auction-rate securities are bonds whose interest rates were set at periodic auctions, on the basis of bids submitted. The market collapsed for them in February after big banks stopped bidding for them.

Earlier today, Citigroup said it reached a settlement with the New York Attorney General and regulators on $19.5 billion in auction-rate securities and pay $100 million in fines.

The entire market in auction-rate securities is believed to be in excess of $200 billion.

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