JPMorgan Chase & Co. and Morgan Stanley yesterday became the latest firms to reach auction-rate securities settlements with New York State Attorney General Andrew Cuomo and other states, agreeing yesterday to buy back at par a total of $7.5 billion of the illiquid securities from retail investors and pay fines of $60 million.

The "agreements in principle" mean the four largest ARS underwriters have now reached tentative settlements over allegations that they misled investors while marketing the ARS as liquid, cash-like investments without disclosing the risks. The four firms have agreed to buy back or provide liquidity for a total of $36.4 billion of ARS and to pay $310 million in fines to New York and other states involved in the investigations. Citigroup Global Markets and UBS AG reached ARS agreements in principle with state and federal regulators last week.

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