Retail brokers battle with Wall Street banks over auction-rate debt scandal

The most powerful retail brokerages in the US are waging war against Wall Street's big investment banks over the $330bn auction-rate securities mis-selling scandal. The brokerages are arguing it was not they who misled their clients but the underwriters on Wall Street who misled them. When the $330bn market for auction-rate securities collapsed in February, under the weight of the credit crisis, millions of people who had been told their investments were the equivalent of cash found that they could not sell them. Andrew Cuomo, the New York attorney general who inherited the anti-Wall Street crusade of Eliot Spitzer, has brought or threatened legal action against many brokers and is investigating dozens of companies, including famous names such as Charles Schwab and Fidelity. He has wrung fines totalling hundreds of millions... [read full story]