Merrill Lynch, Goldman Sachs and Deutsche Bank on Thursday agreed to buy back up to $14.5bn of auction-rate securities and pay $162m in fines to resolve investigations into whether they misled people who bought the debt instruments.

The biggest fine will be paid by Merrill, which sold $12bn of auction-rate securities to retail investors. It will start buying back the ARS on October 1, when it estimates $10bn of the now-illiquid securities will be outstanding.