Flushed with the success of securing $40 billion of settlements from Merrill Lynch, UBS and Citigroup, US state regulators are expected to turn up the heat on banks accused of mis-selling auction rate securities (ARS).

Regulators from several states have demanded documents from Wachovia, the American mortgage lender, which has said that it is cooperating with their inquiries.

The move comes as the US Federal Reserve has stepped up pressure on Wall Street banks to ensure they have sufficient liquid funds to withstand another Bear Stearns-style shock by stress-testing their balance sheets.

On Friday, brokers at Credit Suisse, the investment bank, were accused in a civil lawsuit, filed in New York, of misleading investors about the nature of auction rate securities. STMicroelectronics, the plaintiff, is seeking $415 million (£216 million) in damages. It is also understood that federal prosecutors in New York are preparing a criminal case against two former Credit Suisse brokers. The bank did not return calls yesterday.

The state of Texas is also pursuing settlements from banks that it argues mis-sold such bonds. They are now untradeable and effectively worthless in the market.

Auction rate securities are similar to ordinary bonds except that the interest rate is set at an auction held every week, month or 35 days. If there are no bidders, the entire market for the bonds freezes. Regulators have accused banks such as UBS, Merrill Lynch and Citigroup of playing down the risk of such a seizure in the market.

Denise Voigt Crawford, the Texas state securities commissioner, is leading a 12-strong team investigating a dozen Wall Street banks. She expected that some would “settle very soon, perhaps in the next couple of weeks”.

On Thursday, Citigroup and Merrill Lynch agreed to spend $17.3 billion buying back such securities from about 70,000 clients. On Friday, UBS agreed to pay $22 billion on reacquiring ARS assets and paying fines.

Royal Bank of Scotland and HSBC were also significant providers of ARS assets. RBS did not return calls about whether it was being investigated by US regulators for ARS mis-selling. At the end of June, HSBC offered to buy back ARS assets that its clients had been unable to sell since the market froze in February. It has not disclosed how much these are worth or what the take-up has been.

The New York attorney-general’s office, the Massachusetts Securities Division, the Securities and Exchange Commission and the state of Texas are among those that have led the way in forcing the banks to reimburse clients and, in some cases, to pay fines for misleading investors.

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