US regulators led by New York Attorney General Andrew Cuomo have reached a settlement with three more international banks which marketed financial products to US banks and are now accused of making the products in question look deceptively safe and more profitable than they really were.

The banks in question - Merrill Lynch, Goldman Sachs and Deutsche Bank – are part of a larger group of international financial institutions which sold financial products known as auction-risk securities to US investors, assuring them that these securities would in fact be more profitable and easier to sell than money market investments. Apparently, this was not quite the case. As a result, the banks have now agreed to buy back billions of dollars’ worth of such auction-rate securities, as well as pay a series of heavy fines.

Of the three banks which concluded the settlement, Merrill Lynch incurs the highest toll as it agreed to pay a fine of USD125 million and repurchase up to USD12billion in auction rate securities. Deutsche Bank will pay a USD15 million fine and buy back USD1 billion of the investments, while Goldman Sachs will have to deal with a USD22,5 million fine and repurchase USD1,5 billion in securities.

Citigroup, UBS, Morgan Stanley and JP Morgan Chase have also reached similar settlements with US regulators.