Delaware Department of Justice announces $31 million tobacco payment

Today, the Delaware Department of Justice announced that Delaware has received
its annual payment from the Master Settlement Agreement (MSA) between the states and the tobacco
industry. Payments totaling $31,027,740 were received on April 15 and April 17 and have been
deposited into the Delaware Health Fund.

“I am pleased that Delaware continues to receive significant payments from the Master
Settlement Agreement,” stated Chief Deputy Attorney General Richard Gebelein. “Now more than
ever these funds support critical public health programs across our state. We’ll continue to enforce all
provisions of the Agreement to reduce tobacco use, particularly among children.”

Under the MSA, participating tobacco manufacturers make substantial payments to states that
have reached settlements with the industry. The MSA created new restrictions on the advertising,
promotion and marketing of cigarettes, including outright bans on targeting youth and distribution of
merchandise advertising a cigarette brand. It also funds anti-tobacco education. Studies show that the
vast majority of current adult smokers began smoking before the age of 18, and since the MSA took
effect, youth smoking rates have dropped nationwide.

The Delaware Department of Justice administers the state’s participation in the MSA.
The 1999 Delaware Health Act established the Delaware Health Fund, which receives
payments received by the state under the MSA, created the Delaware Health Fund Advisory
Committee to make recommendations for appropriating monies received by the Delaware Health Fund,
and directed how money paid into the fund should be spent. Learn more about how Delaware
appropriates its MSA payments by visiting http://dhss.delaware.gov/dhss/healthfund/about.html.
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Attorney General’s Office arrests Bear resident for cyberstalking

Members of the public asked to provide information to investigators

On Wednesday, April 15, the Office of the Attorney General, with assistance from
University of Delaware Police, New Castle County Police, and Wilmington Police, arrested a 42 yearold
Bear man for stalking women using the web. The investigation revealed that, over the past two
years, Richard McCullough has used the internet to stalk women in Delaware. McCullough made
contact with his victims using the fictitious names of JToms, Kevin, and John.
McCullough was arraigned and committed to Howard Young Correctional Institution for failure to
post $50,000 cash bail.

The investigation continues. Members of the public with information about this case are urged to
contact Investigator Brian Daly at the Attorney General’s Office at 577-8500.
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Wachovia and Citigroup to pay $618,000 for misleading investors

Community News
April 10, 2009
Wachovia and Citigroup will each pay a $309,000 fine to the State of Delaware for misleading investors about the safety of the auction rate securities market, the Delaware Department of Justice announced on April 9.

The fines will be paid into the Delaware Investor Protection Fund, used by the Department of Justice to enforce investment laws.

Eleven firms were ordered to pay fines in November following a multi-state investigation into the auction rate securities market.

The firms agreed to repurchase more than $60 billion of auction rate securities and were required to notify investors of the repurchase offer. In Delaware, Wachovia sold more than $60 million in auction rate securities and Citigroup sold more than $92 million.

Auction rate securities are long-term financial instruments with interest rates that are reset through weekly or monthly auctions.

When auctions run properly, investors who hold auction rate securities can buy or sell them on a regular basis, but when there are not enough buyers for every security being offered for sale, investors are forced to hold their securities until the next auction.

Since early 2008, many investors have been unable to sell their frozen auction rate securities.

“These agreements send a clear message to investment firms that we will hold them accountable for misleading investors about the sale of these supposedly safe and liquid investment products,” said James Ropp, Delaware Securities Commissioner.

Delaware investors can call (302) 577-8424 for information about the repurchase of Auction Rate Securities.

Story posted online at: http://www.communitypub.com/business/x1098996441/Wachovia-and-Citigroup-to-pay-618-000-for-misleading-investors


Wachovia and Citigroup to Pay $618,000 Fine to Delaware for Sale of Auction Rate Securities

The Delaware Department of Justice announced today that it has reached
agreements with Wachovia Securities, LLC and Wachovia Capital Markets, LLC and Citigroup Global
Markets Inc. following an investigation into their marketing and sale of auction rate securities (ARS).
Each firm will pay a fine of more than $309,000 to the State of Delaware for misleading investors
about the safety of the ARS market. Fines collected from these investment firms will be paid to the
Delaware Investor Protection Fund.

In November 2008, following a multi-state investigation into the failure of the ARS market,
settlements were reached between state and federal securities regulators and eleven investment firms
who offered these products for sale. The firms agreed to repurchase more than $60 billion of auction
rate securities from investors nationwide and were required to notify investors of the repurchase offer.
In Delaware alone, Wachovia sold more than $60 million in auction rate securities and Citigroup sold
more than $92 million in auction rate securities.

“These agreements send a clear message to investment firms that we will hold them
accountable for misleading investors about the sale of these supposedly safe and liquid investment
products,” stated James Ropp, Delaware Securities Commissioner. “We encourage Delaware investors
to contact us at (302) 577-8424 if they have questions about the repurchase of Auction Rate Securities
by these or other investment firms.”

Auction rate securities, also referred to as ARPS, short term paper, 7 day paper, or floaters, are
long-term financial instruments with interest rates that are reset through weekly or monthly auctions.
When auctions run properly, investors who hold these securities can buy and sell them on a regular
basis. However, when there are not enough buyers for every ARS being offered for sale, auctions
“fail” and investors are forced to hold their ARS until the next successful auction. Since early 2008,
the majority of these auctions have failed and many investors have been unable to sell their frozen
ARS holdings.

In response to investor complaints, state-led investigations into possible violations of securities
laws in connection with the sale of ARS began in April 2008. The North American Securities
Administrators Association formed a multi-state Task Force, comprised of securities regulators in 12
states, to investigate whether Wall Street firms had systematically misled investors who purchased
these securities. The Delaware Department of Justice Securities Unit is a Task Force member.
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OFFICE OF THE ATTORNEY GENERAL TO HOST COMMUNITY

The Delaware Attorney General’s Office will host a series of interactive community forums
across New Castle County in April and May to discuss the Community Prosecution program, a
collaborative approach to fighting crime. Launched in 2007 in Wilmington, and expanded last year to
all of New Castle County, Community Prosecution brings residents, prosecutors, and law enforcement,
together to identify the most severe criminal behavior and tackle it head-on.
Date Time Location
Wednesday, April 22 6:30 – 8:00 p.m.
Howard Vocational Technical High School
401 East 12th Street, Wilmington
Wednesday, May 6 6:30 – 8:00 p.m.
Concord High School
2501 Ebright Road, Brandywine Hundred
Wednesday, May 20 6:30 – 8:00 p.m.
Everett Meredith Middle School
504 South Broad Street, Middletown
At each meeting a community prosecutor will explain how community prosecution works. In
addition, a panel of prosecutors and other staff assigned to that geographical area will discuss with
attendees how this effort provides a coordinated approach to a range of crimes including drug and gun
offenses, juvenile offenders, and domestic violence. Staff from the Nuisance Abatement, Senior
Protection, and Victim/Witness Services programs will also participate, and law enforcement agencies
from across New Castle County will be present.

“The Community Prosecution Program works to prevent crime by opening channels of
communication between residents and law enforcement and by focusing on the unique needs of
individual communities,” said State Prosecutor Richard Andrews. “We encourage residents, business
owners, and civic leaders to attend these community meetings, share their concerns and ideas, and help
shape the direction of the community prosecution program in their neighborhoods.”
Each meeting is free and open to the public. Registration is not required. Residents with
questions about the community meetings on neighborhood crime are encouraged to contact the Office
of the Attorney General at (302) 577-8288 or e-mail AttorneyGeneral@delaware.gov. Learn more about
Community Prosecution by visiting www.attorneygeneral.delaware.gov/communityprosecution.
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