October 26, 2011 Comments (0) Blog, Securities Fraud

Securities Regulators Reach Settlement with E*TRADE over Auction Rate Securities

(Last Updated On: July 17, 2015)

According the nasaa.org, The North American Securities Administrators Association (NASAA) announced recently “that a settlement in principle has been reached between E*TRADE Securities LLC and state securities regulators to return approximately $100 million to the firm’s clients who have had their funds frozen in the auction rate securities (ARS) market since 2008.”

In addition to the payments E*TRADE will make to customers, they will also be required to pay a fine of $5 million.

The collapse of the auction rate securities market in 2008 has led to “the largest return of funds to investors in history.” The NASAA reports that “securities regulators have secured settlements calling for firms to repurchase from investors more than $61 billion in auction rate securities.”

This settlement that E*TRADE has agreed to was spearheaded by Colorado state securities officials. It has been alleged “that the firm misled clients by falsely assuring them that auction rate securities were a safe, liquid alternative to cash, certificates of deposit and money market funds.”

According to the NASAA announcement, the settlement is not limited to Colorado E*TRADE customers, but will cover those who were stuck in ARS with E*TRADE nationwide.  E*TRADE will apparently make rescission payments to all customers who purchased ARS before February 2008 for the par value of their investments.

In addition, among other stipulations, E*Trade will “[c]onsent to a special, public arbitration process to resolve claims of consequential damages suffered by individual investors who were unable to access their funds.”

If you are an investor who invested in auction rate securities with E*TRADE and would like to speak to a securities attorney to ensure that you are properly compensated for your damages, please call our Chicago office at 312/238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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