NY reaches deal with major banks over stressed securities

0 Comments | AFP, August, 2008

NEW YORK (AFP) — New York officials said Thursday they had reached a settlement with Merrill Lynch, Goldman Sachs and Deutsche Bank under which the three banks have agreed to buy back stressed securities from investors.

The settlements covering billions of dollars' worth of securities were announced by the office of New York state attorney general Andrew Cuomo after investors claimed they had been misled in purchasing so-called auction rate securities.

Merrill Lynch has agreed to pay a civil fine of 125 million dollars, Goldman Sachs will pay a fine of 22.5 million dollars and German banking giant Deutsche Bank will pay a penalty of 15 million, Cuomo told reporters in a teleconference.

The settlements relate to auction rate securities and how they were...