are the latest two financial firms to settle with the New York Attorney General Andrew Cuomo regarding a widespread investigation into auction-rate securities abuses.
JPMorgan will offer to purchase roughly $3 billion worth of the securities at par value held by retail customers as well as not-for-profits and small businesses that were purchased prior to Feb. 12, according to a release Thursday. JPMorgan has also agreed to pay $25 million in fines.
The company neither admits nor denies allegations of wrongdoing, it says. The New York-based bank estimates the difference between the purchase price and market value of the securities it purchases is roughly $400 million before taxes.
Morgan Stanley, which
to buy back roughly $4.5 billion worth of auction-rate securities from its retail customers earlier this week, has agreed to pay $35 million in fines, Cuomo's office said.
The settlement involved Cuomo's office as well as state regulators under the North American Securities Administrators Association. JPMorgan "continues to fully cooperate" with the SEC's ongoing investigation, it says.
JPMorgan Chase's settlement brings the tally of auction-rate securities buybacks to more than $45 billion. Both
agreed to settle cases last week, in which they would buy back a combined $26.3 billion worth of investments. Separately, along with Morgan Stanley,
to buy back roughly $12 billion worth of auction rate securities last week.
Cuomo had expanded his probe earlier this week to include JPMorgan Chase, Morgan Stanley and
"We are pleased to have settled this matter," Morgan Stanley spokesman Mark Lake said in an emailed statement.
A spokeswoman for Wachovia declined to comment.