Securities regulators from six U.S. states mounted a surprise inspection of the St. Louis headquarters of Wachovia Securities on Thursday as part of a probe into the firm's sales and marketing of auction-rate debt, Missouri officials said.

The office of Missouri Secretary of State Robin Carnahan said a team of 10 regulators went into the St. Louis headquarters of the securities firm seeking information about the Wachovia Corp affiliate's sales practices, internal evaluations of the auction-rate securities market and marketing strategies.

The move on the headquarters came after Wachovia Securities failed to comply with information requests from Missouri securities regulators, state officials said.

Roughly half of the $330 billion auction-rate securities market remains frozen after a February meltdown in which brokerages abandoned their role as buyers of last resort.

he market normally allows issuers, such as municipalities, to borrow money for the long term, but at lower, short-term rates. But investors flooded dealers with paper backed by bond insurers whose credit ratings were in question, forcing many municipal bond issuers to pay uncommonly high interest rates.

Wachovia spokeswoman Christy Phillips-Brown said most securities firms are responding to regulatory inquiries into the auction-rate securities industry and that Thursday's events were part of that process.

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