Colorado settled with Wachovia Securities, which is changing its name to Wells Fargo Advisors this month, regarding its sale of auction-rate securities, the state’s securities commissioner announced.
St. Louis-based Wachovia, formerly A.G. Edwards & Sons Inc., agreed to buy back $157 million of auction-rate securities from Colorado investors by June 30, Commissioner Fred Joseph said in a news release. The settlement followed an investigation into allegations that Wachovia misled investors by telling them the securities were as safe and accessible as cash.
Investors in some of the $330 billion of auction-rate securities, long-term debt with the interest rate reset weekly or monthly, have been caught with bonds they couldn’t sell since the market collapsed in February 2008. Colorado’s accord is part of a $13 billion multistate agreement first reached in August.
Wells Faro announced May 4 that Wachovia Securities is changing its name to Wells Fargo Advisors. On Dec. 31 Wells Fargo & Co. acquired Wachovia Corp., parent of Wachovia Securities.