New York Attorney General Andrew Cuomo said regulators have reached settlements with Merrill Lynch & Co., Goldman Sachs Group Inc. and Deutsche Bank over their roles in selling risky auction-rate securities to investors.
Merrill Lynch will pay a fine of $125 million and buy back the auction-rate securities from investors by Jan. 2. The brokerage must buy roughly $10 billion to $12 billion in the investments.
Deutsche Bank, which must buy back about $1 billion of auction-rate securities, has been fined $15 million. Goldman Sachs has $22.5 billion of the securities to buy back, and was fined $1.5 billion.
"This has been a great day of progress," Cuomo said during a conference call.
Cuomo and other regulators previously reached $42 billion worth of settlements with five major Wall Street banks, including Citigroup Inc. and Switzerland's UBS AG. The attorney general threatened earlier Thursday to sue Merrill Lynch if an agreement was not reached by the end of the day.
The investigations are examining how brokerages sold auction-rate securities before the $330 billion market collapsed in February. Federal and state authorities believe that banks pitched the investments as safe.