Wachovia Corp.’s ARS-Related Sales Practices Under Investigation

State regulators from several states inspected Wachovia Corp.’s securities division today as part of a probe into the company’s sales of auction rate bonds. Investigators searched Wachovia’s St. Louis headquarters to seek information about its sales practices, internal evaluations of the auction-rate securities market and marketing strategies, said Missouri’s Securities Division in a public statement released earlier today. More than a dozen subpoenas were issued to Wachovia executives and agents.

The visit was prompted because Wachovia has not “fully complied” with the Missoure probe, said Missouri Secretary of State, Robin Carnahan. Ten regulators from Missouri, Illinois, Massachusetts, Pennsylvania and New Jersey participated in today’s visit and search of Wachovia. However, Wachovia has issued a statement advising that it intends to fully cooperate with any further review and inquiry.

The investigation was prompted after “hundreds” of Missouri investors called Secretary Carnahan’s office because they were unable to liquidate their money. Like other ARS victims, investors were told by Wachovia that the ARS were “safe and easy to cash in.”