Bank of America employees 'to be subpoenaed in auction-rate row'

5 September 2008

Subpoenas of Bank of America executives are to be sent out today or tomorrow over the bank's alleged miss-selling of auction-rate securities, Reuters reports.

According to an anonymous insider, New York attorney-general Andrew Cuomo is targeting the bankers for apparently wrongly selling the instruments to clients as risk-free investments.

Recent speculation has suggested that Mr Cuomo's office was approaching settlements with banks caught up in the auction-backed securities row.

However, the fact that individuals rather than Bank of America as a whole are targeted in the alleged subpoenas suggests that the authorities are stepping up their battle against the apparent miss-selling.

Both the attorney-general's office and the Securities and Exchange Commission are currently investigating the issue.

While not commenting on the specific subpoena allegations, Bank of America said in a statement that it "continues to cooperate with regulators" and that its "focus" remains on its clients.

"We fully recognize the impact this is having on some of our clients and we are committed to working with those clients during this difficult period," the statement added.

Mr Cuomo's office did not comment on the rumors.

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