NEW YORK (AP) -- The New York attorney general's office said Wednesday it is investigating whether Fidelity Investments was given incentives by Goldman Sachs Group Inc. to sell auction-rate securities to investors.Investigators are examining if Fidelity pitched auction-rate securities that were underwritten by Goldman Sachs because it received other services from the investment bank. A spokesman for New York Attorney General Andrew Cuomo confirmed the probe was under way but declined to provide further details.
The attorney general is leading an investigation into how major Wall Street investment banks and smaller financial companies sold auction-rate securities to customers. The securities were marketed as being as safe as cash until the market froze up amid the credit crisis, causing investors to lose money.
Fidelity said about 600 to 700 accounts out of some 8 million customers held auction-rate securities. Ann Crowley, a spokeswoman for the company, said there was "no financial incentive for Fidelity to promote auction-rate securities as opposed to other short-term investments."
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