RICHMOND — Goldman, Sachs & Co. is paying more than $333,000 to the Commonwealth of Virginia to settle allegations that Virginia investors were misled about the liquidity of the auction-rate securities market.

The State Corporation Commission (SCC) has issued a consent order finalizing Virginia’s participation in a global settlement involving the New York-based firm.

Under the terms of the settlement, the financial services firm is required to confirm that it has repurchased auction-rate securities from its clients.

Although marketed and sold to investors as safe, liquid, and cash-like investments, auction-rate securities were actually long-term investments subject to a complex auction process that failed in early 2008, leading to illiquidity and lower interest rates for investors.

The global settlement was achieved by a multi-state task force of state regulators formed by the North American Securities Administrators Association. During the investigation, state regulators discovered that various securities dealers misrepresented the characteristics of and the risks associated with buying auction-rate securities.

The SCC’s Division of Securities and Retail Franchising actively participated as a member of the task force. The task force was formed in April 2008, shortly after the division and other state securities regulators began receiving complaints from investors holding these instruments.

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Case number SEC-2010-00056