ARS Deals May Cause $4B Write-Downs: Analyst

Law360, New York (August 8, 2008, 12:00 AM EDT) -- Auction rate securities dealers can expect up to $4 billion in write-downs if they follow the example set by Citigroup Inc. in settling allegations that they misrepresented the securities' value, according to a Banc of America Securities analyst.

The recent settlement by Citigroup Inc. with the U.S. Securities and Exchange Commission will likely result in about $500 million in losses for Citigroup, and other auction rate securities dealers facing litigation can expect similar losses, said analyst Jeffrey Rosenberg in a research note published Thursday.

Citigroup announced...
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