NY State Attorney General Andrew Cuomo wants to see detailed account of the bonuses banks and investment houses are planning to pay for 2008, and he wants the figures before the checks are passed out. According to The Wall Street Journal, "He is looking for information from banks that have received or are expected to receive funds under the Treasury Department's Troubled Asset Relief Program."

It is not clear why Cuomo has anything to say about a federal matter, but that has not stopped him from investigating Wall Street matters before. Among the firms being asked to supply data are Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS).

Cuomo's case may turn on whether banks committed fraud by planning to make large bonus payments, but it is not quite clear why rewarding people for their work could be considered criminal. There may be an ethical problem with paying huge sums for work that, in some cases, lost Wall Street firms money. There may also be a shareholder issue about whether people holding stock in these companies think boards should pass out such a large portion of revenue to senior employees.

It has taken forever to curb huge payouts on Wall Street. There are now enough people looking into it that perhaps compensation will become more sane. Once the credit crisis is over, things can go back to the way they were.

Douglas A. McIntyre is an editor at 24/7 Wall St.

We know that some of that money went to pay for plush resort vacations in California. But that is only the small amounts. The Administration just figured -- "Heh, it's not our money going out the door -- who cares what happens to it?"

It was the same thing with $44.5 billion worth of government contracts for Iraq -- give friends the billions and let them do with it what they want. This attitude led to the firing of an Army official who refused to authorize $1 billion in questionable charges to KBR, the unit of Halliburton (NYSE: HAL) that Dick Cheney formerly ran.

American International Group (NYSE: AIG) is not required to report how it's spending our money, but hints have surfaced about where some of it went: $18 billion to cover losses on AIG's securities lending -- where it lent out securities which then declined in value, and $13 billion to pay guarantees on Guaranteed Investment Contracts (GICs). I know I had nothing to do with these bad business bets so why am I paying for them?

CNNMoney reports that Morgan Stanley (NYSE: MS) is the latest bank to buy back its worthless Auction Rate Securities (ARS) from individual investors. With that buyback, Morgan Stanley follows in the wake of Citigroup, Inc. (NYSE: C), Merrill Lynch & Co., Inc. (NYSE: MER) and UBS AG (NYSE: UBS).

CNNMoney notes that Morgan Stanley said it would offer to repurchase all ARS "held by individuals, charities and small and medium-sized business with accounts of $10 million or less at the bank." Morgan Stanley will begin to start buying back $4.5 billion worth of ARS on September 30th and will "make its best effort to provide liquidity solutions" for institutional investors by the end of 2009. But New York attorney general Andrew Cuomo is not satisfied with Morgan Stanley's proposal.

Meanwhile, the list of big ARS issuers that have not settled grows shorter. Here are six holdouts (with their 2007 municipal ARS issuance in parentheses):

• JPMorgan Chase (NYSE: JPM) ($5.2 B)
• Goldman Sachs (NYSE: GS) ($4.3 B)
• Bank of America (NYSE: BAC) ($3.7 B)

The Washington Post reports that Citigroup, Inc. (NYSE: C) has agreed to buy back $7 billion worth of Auction Rate Securities (ARS) it sold to its clients. Citi will also pay a $100 million civil fine. This is a great move for individuals and companies that bought this toxic waste. The question is -- will the rest of the $330 billion ARS industry follow Citi's lead?

Citi will buy back the debt from 40,000 customers around the U.S. by November 5. And the $100 million fine will be split -- $50 million to New York and $50 million to the North American Securities Administrators Association. Cuomo had accused Citi of "wrongly telling customers that auction-rate debt was safe, liquid and the equivalent of cash." It looks like current CEO Vikram Pandit wanted to clear the decks of a problem he inherited and in so doing help to clear Citi's name.

But the question is whether Cuomo -- having achieved this considerable victory for defrauded ARS customers -- will have the clout to clear the rest of the $330 billion worth of ARSs that were frozen. There are many other firms -- including Merrill Lynch & Co., Inc. (NYSE: MER) and UBS AG (NYSE: UBS) which have their own frozen ARS problems. And until all of these firms make their investors whole, a dark cloud will hang over their reputations.

This cloud could seriously damage their future prospects when the industry recovers a few years hence. The sooner the rest of the industry follows Citi's lead, the better.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock and has no financial interest in the other securities mentioned.

The New York Times reports that Andrew Cuomo, New York's attorney general, has sued UBS AG (NYSE: UBS). He charges UBS of deceptive sales practices. Massachusetts beat him to that punch when it sued UBS for deception after revealing e-mails indicating that UBS decided it would be better to foist the toxic waste on its naive wealth management customers rather than taking the hit of writing down the holdings on their books.

I began following the Auction Rate Securities (ARS) market -- those bond-like securities whose rates used to reset in weekly auctions -- back in February when those auctions failed. Since then 5,341 comments have appeared from people whose hard-earned cash is frozen in what was marketed to them as safe, money-market-like securities with slightly higher yields.

I credit Cuomo with adding a useful detail to the brief against UBS. He points out that UBS senior executives were selling $21 million worth of ARSs as its brokers were desperately pushing the toxic waste onto their individual customers. This reminds me of the same kind of deception we saw during the dot-com era when an analyst, Henry Blodget, wrote bullish reports about companies that he trashed in e-mails to his colleagues.