Wachovia Fined for Texas Investments

AUSTIN, Texas (AP) _ Wachovia Securities has been ordered to pay a $3.9 million fine under a consent order signed by State Securities Commissioner Denise Voigt Crawford.

Crawford said in a news release Monday that the securities dealer was fined for misleading investors about the safety of the auction rate securities market.

Wachovia Securities had agreed in August to repay more than $8.5 billion to investors across the nation. The fine outlined in the consent order in Texas is the state’s share of a $50 million penalty Wachovia agreed to pay.

Crawford said Wachovia must complete the repurchase of securities from customers in Texas by June 30. The auction rate securities market froze in February 2008.

Crawford said Wachovia Securities misled clients into thinking their securities could be accessed at any time when, in fact, they were long-term bonds that were subject to a complex auction process. When the market failed, the funds were frozen.

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