RBC Subpoenaed in US Over Auction-Rate Securities
RBC has confirmed it is one of several banks subpoenaed in the US over auction-rate securities.
The subpoena stems from the multibillion-dollar securities fraud lawsuit, launched against UBS by NY Attorney General Andrew Cuomo, over the collapse of the $330bln market for auction-rate securities.
Cuomo said today that Citigroup has agreed to buy back up to $20bln of the frozen securities and is paying two $50mln fines. It is unclear just how deeply RBC could get stung by its involvement, but there is certainly an expectation that the issue will negatively impact RBC’s balance sheet. RBC has already taken a C$212mln write-down on its securities.