Goldman Sachs Settles ARS Allegations in Virginia & Colorado

A press release out of Richmond, VA said that Goldman Sachs & Company had reached a settlement of $333,000 with the State Corporation Commission for allegations that it misled investors who purchased auction rate securities (ARS). The settlement, which is a part of a global settlement with the New York based company, also requires the company to confirm that it has bought back the securities from investors. Regulators had alleged that Goldman Sachs misrepresented the ARS to be safe, cash like investments that were totally liquid. Unfortunately, when the market froze in February 2008, investors were unable to have access to their cash.

In a related release by the Denver Business Journal, Goldman agreed, in a settlement with the Colorado Division of Securities, to buy back $5 million worth of auction rate securities (ARS). This is the 10th finalized settlement in Colorado relating to ARS and over the past couple of years Colorado has reached settlements with Deutsche Bank, Citigroup, Bank of America, Credit Suisse, JP Morgan, Merrill Lynch, RBD Capital Markets, UBS Securities and Wachovia.

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