Wachovia Securities Involved in Raid in Auction Rate Probe

Wachovia Securities, formerly AG Edwards, was involved in a raid during a surprise probe by Missouri regulators on Thursday.

Securities regulators from six states raided the Wachovia Securities headquarters in St. Louis on Thursday as part of a probe for the investigation of the bank's sales of auction-rate debt.

The office of Missouri Secretary of State Robin Carnahan said a team of 10 regulators entered the headquarters seeking information about sales practices, internal evaluations of the auction-rate securities market and marketing strategies. More than a dozen subpoenas were also issued.

The investigation and subsequent raid came after Wachovia Securities failed to comply with information requests from Missouri securities regulators.

In May, Wachovia (NYSE: WB) said it had received inquiries and subpoenas from federal and state regulators, including the U.S. Securities and Exchange Commission, into underwriting and sales of auction-rate securities.

Wachovia owns 62 percent of Wachovia Securities. Prudential Financial Inc (PRU.N) owns the remainder. The St. Louis headquarters were known as A.G. Edwards Inc before Wachovia acquired it last October 1.

Wachovia stock closed on Thursday at $13.44, up 27.5% ($2.90). Prudential stock is at $61.87, up 2.96% ($1.78), at Thursday's close.

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