Now eight large brokerage firms have settled with Auction Rate Securities (ARS) investors. This afternoon Bloomberg News reports Goldman Sachs (NYSE: GS) and Deutsche Bank settled with state regulators. Merrill Lynch & Co., Inc. (NYSE: MER) announced another prong of its settlement earlier in the day.

What are the terms of the settlement for the latest two? Bloomberg writes that "Goldman will buy back $1.5 billion of the securities and pay a $22.5 million fine. Deutsche Bank will redeem $1 billion of debt and was fined $15 million." In addition to the rogues gallery of big ARS issuers who have yet to settle, investigators are targeting medium-sized brokers -- Charles Schwab (NYSE: SCHW), Fidelity Investments and E*Trade Financial Corp. (NYSE: ETFC).

This leaves major ARS issuers lagging behind their peers. Here are three holdouts (with their 2007 municipal ARS issuance in parentheses):

• Bank of America (NYSE: BAC) ($3.7 B)
• RBC Capital Markets ($1.2 B)
• Lehman Brothers (NYSE: LEH) ($1.1 B)

What are they waiting for?

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

Goldman and Deutsche Bank join Auction Rate Securities settlement bandwagon originally appeared on BloggingStocks on Thu, 21 Aug 2008 19:20:00 EST. Please see our terms for use of feeds.