Bank of America subpoenaed over sale of securities

In a filing with the Securities and Exchange Commission, the Charlotte, N.C.-based bank said subsidiaries Banc of America Investment Services Inc. and Banc of America Securities LLC are cooperating fully with the requests.

Auction-rate securities are bonds whose interest rates are set at periodic auctions, on the basis of bids submitted. The market collapsed in February amid turmoil in the credit markets.

Regulators have been investigating some banks' involvement in the sale of the securities.

Earlier Thursday, Citigroup Inc. said it reached a settlement with the New York Attorney General and regulators to repurchase $7 billion in auction-rate securities and pay $100 million in fines.

Regulators claimed the investments were marketed as safe even when banks knew of liquidity risks during the downturn in the credit markets.

According to the SEC filing, four purported class action lawsuits have also been filed against Bank of America on behalf of purchasers of auction-rate securities. The cases relate to the sale of the investments between May 2003 and February 2008 and allege that the bank violated certain securities laws in regards to its marketing and sale of the securities.

The actions seek unspecified damages and attorneys' fees.

A related individual federal action as well as several related Financial Industry Regulatory Authority arbitrations have also been filed, the bank said.

A Bank of America representative was not immediately available for comment.