New York Attorney General Andrew Cuomo sued Charles Schwab Corp. on Monday, claiming that the California discount brokerage falsely represented auction-rate securities as liquid investments without disclosing their risks.

Schwab, anticipating the filing of the suit, said the attorney general is ignoring the "real culprits," banks that underwrote the products. In a July 24 letter to Cuomo's office released Monday, Schwab said the state let the underwriters off the hook last year when he agreed to settle claims against them related to the securities. The underwriters include Citigroup Inc., UBS AG and Goldman Sachs Group Inc.

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