Investigation of Auction Rate Securities
05/27/08
Swanson Midgley attorney John Miller is investigating possible improper conduct by stockbrokers and broker-dealers in the sale of auction rate securities (“ARS”). Information acquired to date indicates that claims may exist for investors who purchased these securities in reliance on brokers’ representations that ARS were safe, liquid investments.
ARS are securities consisting of long-term bonds or preferred stock with variable interest rates and yields, which yields were periodically reset by auctions of the securities. Major brokerage firms often marketed ARS to investors as a safe, liquid alternative to money market funds. In February, 2008, the ARS market collapsed, as numerous auctions failed. As a result, investors who thought they had ready access to their ARS funds now have learned that their ARS investments are illiquid.
Broker-dealers who sold ARS include Citigroup, Wachovia, Merrill Lynch, Smith Barney, UBS, and Morgan Stanley, among others. Major ARS issuers have included Blackrock, Nuveen, Eaton Vance, Legg Mason and others. Many ARS have been issued and backed by governments and other major institutions—in Missouri, Mr. Miller is examining the sale by brokers of securities backed by the Missouri Higher Education Loan Authority, known as “MOHELA”.
If you purchased ARS from or through a stockbroker or broker-dealer, you may have a claim for damages related to your purchase. If you wish to discuss this matter or have questions about your rights, please contact Mr. Miller at 816-842-6100.
For more information, visit Mr. Miller's bio.
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