DETROIT -- Michigan Attorney General Mike Cox announced Thursday that his office reached a settlement with the investment arm of Comerica Inc. over the sale of $1.46 billion in auction-rate securities.

Comerica, which did not admit or deny the allegations, has agreed to offer full buybacks to 1,500 account holders who bought the risky investments that have led to similar probes and settlements nationwide.

Comerica also has agreed to pay a $10,000 statutory fine, $100,000 to a state-run investment advocacy group and $750,000 to the Financial Industry Regulatory Authority, the industry's self-policing body.

The Dallas-based company said the buyback will trim its third-quarter earnings by $75 million, or 50 cents per share, and that its dividend will be reduced by 50 percent beginning in the fourth quarter.

The auction-rate securities market involved investors buying and selling instruments that resembled corporate debt whose interest rates were reset at regular auctions, some as frequently as once a week. They were sold as being as safe as cash, but the market for them fell apart earlier this year amid the downturn in the broader credit markets.

Cox said at a Thursday morning news conference in Detroit there was no indication Comerica committed a crime. Still, he said, its Detroit-based Comerica Securities subsidiary underestimated risks and "didn't reflect that the market is collapsing" to novice and seasoned investors alike.

Investors complained to state regulators that the supposedly liquid accounts had been "frozen," Cox said.

"I think Comerica messed up, but today they stepped up," he said.

He said it's the nation's largest buyback of auction-rate securities by a seller.

Comerica Chairman and CEO Ralph W. Babb said in a statement that he was pleased that the company reached a deal in "a prompt and appropriate manner."

"Even though Comerica Securities' distributor role in the ARS market differed substantially from the roles held by Wall Street firms, we know our clients holding ARS have been facing unprecedented market conditions," he said.

The settlement resolves pending investigations into consumers' complaints by the state Office of Financial and Insurance Regulation and the industry's regulatory authority started earlier this year.

A slew of Wall Street powerhouses have agreed to buy back securities, including Merrill Lynch & Co., Goldman Sachs Group Inc., Deutsche Bank, UBS AG, Citigroup Inc., Morgan Stanley, JPMorgan Chase & Co. and Wachovia Corp.

Agreements in principle also have been reached with SunTrust Investment Services Inc., SunTrust Robinson Humphrey Inc., First Southwest Co. and WaMu Investments Inc.