Wachovia Securities in auction-rate securities probe

Wachovia Securities has received subpoenas and inquiries from the Securities and Exchange Commission and regulators in several states requesting information on auction-rate securities, according to a Wachovia Corp. filing with the SEC.

Regulators have requested data concerning the underwriting, sale and subsequent auctions of municipal auction-rate securities and auction-rate preferred securities, the filing states.

Charlotte-based Wachovia says it will cooperate fully in the probe.

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Since February, the auctions that set the rates for most auction-rate securities have failed, resulting in a lack of liquidity for the securities.

According to the filing, Wachovia and Wachovia Securities have been named in a civil suit seeking class-action status for customers who purchased and continue to hold auction-rate securities based on alleged misrepresentations made with respect to the quality, risk and characteristics of the securities.

Wachovia says it intends to vigorously defend itself in the civil case, which was filed in the U.S. District Court for the Southern District of New York.

Wachovia Securities is the trade name for the corporate, investment-banking and capital markets businesses of Wachovia (NYSE:WB).