Cuomo likely to file Schwab ARS suit on Monday: report

Source: Reuters

Mon Aug 17, 2009 1:20am EDT

(Reuters) - New York Attorney General Andrew Cuomo, probing illegal marketing and sales of auction rate securities (ARS), is likely to file a lawsuit on Monday against Charles Schwab Corp for civil fraud, the Wall Street Journal said, citing people familiar with the matter.

As a part of the lawsuit, Cuomo will likely present transcripts of recordings between Schwab brokers and customers that allegedly show how the ARS were misrepresented by brokers as easy-to-sell alternatives to cash, according to the paper.

Cuomo also claims that Schwab did not train brokers about the risks that the ARS market could stop functioning, leading to money being locked for a long time, the paper said.

Schwab, the largest U.S. online brokerage, which has maintained that the allegations are "without merit," said in a statement that the filing of any charges against the company is "totally unwarranted."



Read more: http://www.reuters.com/article/newsOne/idUSTRE57G0PC20090817

A broker for UBS here assured my mother's trust officer and trustees that those things were cash equivalents and were entirely liquid.

Fortunately, her trustee/attorney swings a heavy bat and they did convert them to cash after Mother died - and after some, um, persuasion by her attorney.

UBS (Formerly Union Bank of Switzerland) is questionable in all kinds of ways.

I hope Cuomo gets around to them.