New York Attorney General Andrew Cuomo has warned the banks and securities firms that his investigation into their sale of auction-rate securities will continue. “You have literally dozens of institutions involved,” Cuomo said in a live interview on CNBC. “We’re starting at the top and working our way down.”

Cuomo was commenting on huge settlements his office reached with JPMorgan Chase and Morgan Stanley. Following the lead set by Cuomo’s settlements with Citigroup and UBS the two Wall Street giants agreed to repurchase auction rate securities at face value from investors who claim to have been misled as to the instrument’s safety. The latest settlements will likely cover securities with a face value of $7 billion. The Wall Street pair will also pay fines of $25 million and $35 million, respectively.

Auction-rate securities are a form of corporate debt with rates set at periodic auctions. These securities performed well prior to the market collapse earlier this year, when it became impossible to find anyone willing to bid on them. This caused problems for investors, who claimed that the big institutions that dominate the market had represented the securities as virtually risk-free. “I understand there are hundreds of thousands of (investors) in this situation, and we’re going to do the best for them,” Cuomo said.

Several other market participants, including Wachovia and Merrill Lynch, are known to be negotiating settlements with state and federal regulators. Cuomo acknowledged that Merrill had offered to buy bank $12 billion of the securities it had sold, but he characterized the offer as not enough. Negotiations are continuing.