SEC seeking info on auction-rate debt sales

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

More on regulators’ probes into so-called auction-rate debt, which have caused misery for thousands of investors who have become trapped in the securities amid the credit crunch: Bloomberg News reports today that the Securities and Exchange Commission wants brokerages to hand over more details about how the bonds were pitched to investors.

‘We are looking at representations made to investors when they purchased auction-rate securities,’ Lori Richards, head of the SEC’s Office of Compliance Inspections and Examinations, told Bloomberg.

The SEC’s inspections office sent letters to the biggest sellers of auction-rate debt this month seeking the names of customers who purchased the notes and the identities of brokers who sold them, Bloomberg reports.

On Thursday the North American Securities Administrators Assn. said nine states were coordinating their probes of the $330-billion auction-rate market. And New York Atty. Gen. Andrew Cuomo was reported to have subpoenaed 18 banks and brokerages about their involvement in the securities. For more on the states’ efforts check out this earlier post.

Posted April 18, 2008