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Regulators Start Auction Rate Investigations

By Mark H. Astarita, Esq.

Auction rate securities are quickly becoming the next big retail investor problem. I am now getting calls almost daily from investors who say that they were sold the securities as an alternative to money market funds, and paid higher interest, and who now cannot sell their investments, which have become completely illiquid.It will be interesting to see how these cases shake out - exactly what were investors told about these securities. One thing is certain - they were not told that they might be completely illiquid.But that is where we are. Those investments that were the equivalent of money market funds cannot be sold. To add to the problem, UBS announced that it is going to mark down auction rate securities in its retail customer accounts on Monday - to reflect the lack of liquidity...continue to full post

Full post as published by SECLaw.com on March 31, 2008 (boomark / email).