HELENA, Mont. – Montana Commissioner of Securities and Insurance Monica Lindeen today announced a settlement agreement with RBC Capital Markets Corporation. In the agreement, RBC Capital Markets has agreed to return $9,875,000 to Montana residents who purchased auction rate securities from the firm, pay a $20,733.04 fine which will be deposited to the state’s general fund, and contribute $5,000 to the Investor Protection Trust, a non-profit organization, for the purpose of providing investor education to Montana consumers.
“This resolution is another step in protecting Montana investors harmed by unmarketable investments in auction rate securities,” said Lindeen.
RBC Capital Markets was accused of misleading investors about the safety and liquidity of auction rate securities. The market for auction rate securities collapsed in February 2008, leaving investors holding millions of dollars in illiquid investments.
Auction rate securities (ARS) are long term, variable rate corporate or municipal bonds tied to short term interest rates.
Lindeen’s office has recovered more than $72 million in auction-rate security settlements, including approximately $10 million from RBC, $38 million from Merrill Lynch, $9.5 million from Citigroup, $14 million from Wachovia and $550,000 from Banc of America.