Securities regulators went to the company’s St. Louis, Missouri headquarters and requested documents regarding its auction rate securities sales practices. The investigation is a result of numerous complaints filed with Missouri’s Secretary of State, Robin Carnahan.
Wachovia Securities is part of Wachovia Corporation, which is a major player in South Florida. It is still too early to tell if the investigation will have any impact on Floridians in general.
Auction rate securities were generally marketed as safe investments and investors had the ability to liquidate their holdings quickly. When investment banks stopped buying these securities due to their increased risk, perceived or real, investors were left out in the cold. The ramifications were felt beyond investors as local governments were hit hard as well in many areas.
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