Corporate & Securities Law

Attorneys at SNSFE are investigating abuses in auction rate securities as disgruntled investors cannot cash out of these investments.  Auction rate securities, or ARS, are long-term municipal bonds, corporate bonds or preferred stocks that are traded at auctions that set the instruments' interest rate and ultimately the price of the security.  Retail buyers can get in with as little as $25,000.  But the liquidity has dried up,  especially after major Wall Street firms stopped bidding in auctions last month.  And then, many investors discovered that they couldn't get their cash.   

Whether or not liquidity returns is besides the point according to some commentators and SNSFE is investigating a full panoply of abuses associated with these products.  Also, investors ought to beware that firms have been coming up with other liquidity options, such as offering loans against ARS.  But margin loans involve other risks, such as the possibility of losing securities from a sellout.  Information can be shared with attorneys at SNSFE.