Goldman Sachs Settles Auction-Rate Suit

NEW YORK( TheStreet)-- Goldman Sachs ( GS) will pay $333,000 to settle allegations that it misled Virginia investors who purchased auction-rate securities.

Regulators in Virginia had alleged that the bank misrepresented auction-rate securities as safe investments and did not inform investors of the risks associated with buying auction-rate securities.

A press release on the Commonwealth of Virginia's State Corporation Commission's website says that under the terms of the settlement, Goldman must repurchase the auction-rate securities from its clients.

A spokesperson for Goldman was not immediately available for comment.

--Written by Maria Woehr in New York.

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