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Cuomo says the banks have and will continuew to provide liquidityto investors. Last October, agreed to buy back as much as $4.7 billiobn in auction-rate securities it sold to aboutt 5,500 investors, small businesses and smal l charities before the market collapsed inFebruary 2008. According to the Securitiesz andExchange Commission, the settlement also required BofA to “use its best to provide up to $5 billion in liquidity to businessews and institutional investors with accounts valued at $15 million or and charities with accounts valued at $25 milliob or more.
The agreement resolved allegations that securitiew dealers made misrepresentations to customers durinb salesof auction-rate securitiess about their safety and liquidity. Auction-rate securities have interesyt rates that are reset at weeklty or monthly auctions run byinvestmenrt firms. The $330 billion marke collapsed last year, when investors became alarmed at the prospects of the ability of corporate borrowers coverintg debt service onthe securities. Many were left with securities they coulcd not sell intothe market. Charlotte-baserd BofA (NYSE:BAC) neither admitted nor deniexd wrongdoing. The SEC also has finalizecd a settlement with BofA overthe securities.
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