Corporate & Securities Law

Investors have discovered Wall Street?s version of the Hotel California: they have ?checked in? to an investment that they cannot leave.  Since mid-February, a significant number of auctions (70% according to Thestreet.com) in ?auction rate securities? have failed, leaving the $330 billion market in disarray. 

At least one state securities regulator has commenced an investigation, and FINRA (the Financial Industry Regulatory Authority) has issued guidance for investors (?Auction Rate Securities: What Happens When Auctions Fail?).  Additionally, UBS and Goldman Sachs are among the financial services firms which have decided to markdown the value of these securities on client statements, with most markdowns between 3% and 5% but some as high as 20%.  Moreover, one secondary market provider has reported transactions completed recently with 30% discounts!

Let?s examine the problem and explore the recourse that investors may have...

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