Nov 19 2008
Contact: Laura Egerdal; Ryan Hobart, (573) 526-0949; (573) 526-4734

Carnahan Announces Settlement with Commerce Brokerage Services

$545 Million of Auction Rate Securities Returned to Investors

Carnahan launched a full-scale investigation into Commerce and other firms after formal complaints were filed with the Secretary of State’s Office. In August, Carnahan reached a $9 billion agreement with Wachovia Securities that returned money to over 40,000 investors. 

“The auction rate securities meltdown affected thousands of Missourians. My number one priority has been to put money back into the hands of these investors,” Carnahan said. “I’m pleased that Commerce is doing the right thing for their clients.”

Investors reported that auction rate securities were sold as money market equivalents, but investors have not been able to access their money as promised since the market froze in February. The order finds that Commerce failed to adequately supervise its agents who improperly sold auction rate securities to investors.

Commerce has offered to buy back the auction rate securities held by each of its clients, and agreed to reimburse investors who sold their auction rate securities for an amount below par after the meltdown.  Commerce clients began receiving buy back offers August 22, 2008.

Commerce also agreed to make a $500,000 payment to the Missouri Investor Education and Protection Fund, and will hire a special consultant to analyze the brokerage’s supervisory and compliance policies related to non-conventional investments. In addition, Commerce agreed to participate in a special arbitration process for investors who suffered a loss or damages due to an inability to access their money.

Secretary Carnahan’s Securities Division is continuing its investigation into several firms concerning auction rate securities, and will continue to serve as a leader in the national task force of state securities regulators seeking solutions for investors who cannot access their money.

To learn more about auction rate securities and the redemption plans offered by various firms, contact the Missouri Securities Division at (800) 721-7996.To find out more about Missouri’s Securities Division, visit

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