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Money Market Fund Halts Sales

By Mark H. Astarita, Esq.

During the auction rate securities crisis, when investors were complaining that no one told them that the auctions could fail, or that their investment might be illiquid, I often commented that the reason no one told them that was that auctions hadn't failed in decades, and the possibility was remote. I would then ask, "has anyone told you that your money market funds might not be liquid? Has anyone told you that your money market funds might go below a dollar a share?" The answer is always "No."Well, both events can happen. We treat money market funds as cash - a completely liquid investment that you can cash in at any time, write a check against any time you want, just like cash in your checkbook. But it just ain't so. Read a prospectus for a money market fund...continue to full post

Full post as published by SECLaw.com on September 16, 2008 (boomark / email).