New York Attorney General Andrew Cuomo's office, which is investigating Wall Street's sales practices in auction-rate securities, told JPMorgan Chase & Co, Morgan Stanley and Wachovia Corp on Monday that it wants to begin settlement talks immediately.

According to letters to the three banks, settlements would have to follow the lead set by UBS AG and Citigroup Inc, which last week agreed to pay a combined $250 million in fines and will repurchase about $27 billion of the debt from their clients.

"It would be unfair to consumers with accounts at other firms, as well as to the firms that settled, if our investigation were to slow down or stop," David Markowitz, Cuomo's top investor protection lawyer, wrote. "Our investigation's focus is shifting to the next group of market participants."

Citi and UBS last week were the first settlements struck by New York since it began investigating five months ago whether brokerages had falsely told clients that auction-rate securities -- long-term debt instruments that pay yields reset through weekly or monthly auctions -- were as safe and as liquid as cash.

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