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Bank of America divisions settle

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By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: July 31, 2009

TAMPA - Florida's Office of Financial Regulation has reached a $4.8 million settlement with Banc of America Securities LLC and Banc of America Investment Services.

The companies, subsidiaries of Bank of America, misled investors about the safety of auction rate securities, according to the state. When the market for auction rate securities failed in February 2008, investors were stuck with illiquid investments, the state said.

"This action underscores our efforts to ensure investors are not harmed by investments in unmarketable auction rate securities," said Linda Charity, acting commissioner for the Office of Financial Regulation.

The fine was the result of Florida's participation in a multistate investigation by the North American Securities Administrators Association. Nationally, the settlement was $50 million.

Some investors who purchased the auction rate securities already have had funds returned to them.

This is the fourth such settlement in Florida this year.

Other institutions that have already settled include Citigroup Global Markets, Wachovia Securities/Wachovia Capital Markets and JP Morgan Chase & Co.

Reporter Shannon Behnken can be reached at (813) 259-7804.

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