State will collect a $1.1 million fine
The state Bureau of Securities has signed a final consent order that requires JPMorgan Chase & Co. to complete the repurchase $91,250,000 of auction-rate securities or ARS from New Jersey clients to settle allegations that the firm's securities dealers failed to disclose risks of the ARS market.
Although marketed and sold to investors as safe, liquid, and cash-like investments, ARS are actually long-term investments subject to a complex auction process that failed in early 2008, causing illiquidity and lower interest rates than investors were promised.
Under the settlement announced Thursday, New Jersey investors are eligible to have approximately $91,250,000 in ARS repurchased.
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