Investment Fraud Lawyer Blog

A few minutes ago, Matthew Goldstein at BusinessWeek.com reported that one of Citigroup's top brokers, Richard Zinman, has left for Credit Suisse. Barron's magazine recently ranked Zinman as the nation's 6th-largest broker in terms of assets under management, revenues generated, and customer satisfaction.

According to BusinessWeek, Zinman and his team of junior brokers left Citigroup's wealth managment group in part because so many of his wealthy clients had lost millions in Citi-managed hedge funds, notably Falcon Strategies and ASTA/MAT bond funds.

The manager of those hedge funds, Reaz Islam, departed Citigroup recently as well. He had been with the firm for nearly 18 years.

The Financial Regulatory Authority (FINRA) has proposed an important potential change to a rule that relates to what information the general investing public can find out about stockbrokers and other financial professionals. Currently, the public can obtain only an incomplete disciplinary record on a stockbroker either by contacting their state securities regulator (a state-by-state listing can be found , or by logging onto the FINRA website . One major flaw in this process, however, is that the public can only learn what the broker or brokerage firm is required to disclose, which does not include the entire history of a financial advisor's rule violations or other misconduct.

FINRA recently released a proposed rule that would help to remedy this shortcoming. Under the proposed amendment, registered brokerage firms would be required to report allegations of rule violations against individual brokers made in arbitration filings and civil lawsuits in which the broker is not named as a defendant. Under current rules, a firm may avoid reporting the broker unless he or she is actually a party. The proposed rule was heralded by investor protection advocates as a major step forward. For example, Karen Tyler, President of the North American Securities Administrators Association, said, "we applaud the joint efforts of the states and FINRA, working together, to produce this important proposal, which will help protect investors from unscrupulous brokers."

FINRA should announce finally whether the rule will be adopted some time in the summer or fall of this year.

According to an article by Josh Hamilton on Bloomberg.com, Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said in an interview in Frankfurt, Germany that the U. S. economy is less than halfway through the current credit crisis.

Said the "Oracle of Omaha": “I don’t necessarily think we’re halfway through or necessarily a quarter of the way through the effects throughout the general economy. The initial effects are felt by the people who really did the silliest things, but you can have a whole bunch of domino-type effects that eventually can get to people who are doing fairly sound things.”

The credit crisis, which has set home foreclosure records and collapsed Wall Street's fifth-largest securities firm, continues to wreak havoc on Wall Street. Buffett commented that the damage to the economy and individuals will keep mounting. “In my judgment, there’s a good chance that most of that is not over.”

Cleveland, Ohio-based Keycorp announced today that it may have to write off up to 1.3% of its entire loan portfolio due to weakness in new home values, according to a story on Businessweek.com. Other regional banks in the construction and home improvement loan market such as Wachovia, Fifth Third Bankcorp, and RegionsFinancial, could be similarly affected. Just three weeks ago Keycorp expected the losses to be less than .9% of its portfolio. The regional bank, which holds $97 billion in assets, also said in a recent SEC filing that losses on home improvement and education loans also contributed to its revised estimated losses.

While subprime mortgage woes have rocked banks over the past year, Keycorp's announcement is evidence that the general decline should affect the short term conventional loan market as well. The national home price index has declined 14.1% in the first quarter of 2008. The news -- and particularly the sudden change in estimates since Keycorp's earnings announcement in April -- signaled to some market analysts that an economic recovery in 2008 should not be expected. An R.W. Baird analyst is quoted as saying that "those hoping for a recovery in the second half of the year will be disappointed."

There’s a mighty cold wind blowing for those who own auction rate securities backed by student loans, Aaron Pressman of BusinessWeek online reported today in an article entitled "Auction-Rate Securities: Out of Luck." In sunnier times, auction rate securities (“ARS”) were pitched as higher-yielding alternatives to certificates of deposit and money market funds for short-term investors who needed safety and liquidity. In February, however, the market for ARS collapsed amid credit market turmoil when Wall Street firms that conducted the auctions failed to act as market makers. While some municipalities and closed-end fund issuers have redeemed or announced plans to redeem ARS they issued, holders of ARS backed by student loans are having no such luck. The key problem is that the authorities that issued student loan ARS have little or no ability to raise additional funds to redeem them. What’s more, the interest rates for many student loan-backed ARS have fallen to zero. What’s left for such ARS holders is the blood-freezing prospect of holding, in essence, a long-term bond paying little or no interest. “A lot of people are coming to the realization that there’s no light at the end of the tunnel for these,” the article quoted Cathy Gregg, a partner at corporate finance consulting firm Treasury Strategies in Chicago, as saying.

Continue reading " Holders Of Student Loan-Backed Auction Rate Securities Facing Endless Winter? " »

According to Charles Gasparino of CNBC.com, JP Morgan Chase has launched a major round of layoffs in the firm's highly regarded investment banking department. In an attempt to downsize the unit amidst a massive slowdown in business, at least 200 executives – most of them junior bankers – were laid off last week. The firm says that the layoffs are unrelated to the firm's recent purchase of Bear Stearns, but it has also said that it will cut JPMorgan Chase people to make room for Bear Stearns executives it wants to keep.

JP Morgan has as many as 1,000 executives in the investment-banking department, which translates to a cut of at least 20 percent. While most Wall Street firms have been cutting between 5 and 10 percent of their staff, cuts at JP Morgan are comparably deeper even though the bank has not faltered as much as other firms with losses related to investments in subprime securities.

Continue reading " JP Morgan Chase Lays Off 200 Executives " »

According to a recent article on Bloomberg.com, the collapse of the auction-rate securities (ARS) market has cost shareholders of about 150 public companies more than $1.8 billion in investment losses to date.

From Google to JPMorgan Chase, more than 300 companies are struggling to value auction-rate bonds after dealers, battered by subprime-related losses, abandoned the $330 billion market in February.

“We've seen a real acceleration in the number of companies announcing they hold them, and also a greater portion of them taking write downs,” said Barry Silbert, CEO of Restricted Stock Partners, which operates the largest secondary market trading system for the securities.

Continue reading " Auction Rate Losses Costing Public Companies Over $1.8 Billion " »

According to Fortune magazine, hedge fund manager David Einhorn, who is betting against Lehman by selling its stock short, recently gave a speech in which he renewed questions about the quality of the firm’s first-quarter earnings report.

Even though the market accepted Lehman’s report when it came out in March, Einhorn has questioned Lehman’s outsized unrealized gain on an equity investment and wondered why the firm had not taken larger writedowns on its holdings of collateralized debt obligations (CDOs).

Continue reading " Short-Seller Einhorn Takes Lehman To Task " »

As banks write off more than $170 billion of additional reserves by the end of next year, Oppenheimer & Co. analysts led by Meredith Whitney estimate that the U.S. credit crisis will extend into and even beyond 2009, according to an article by Luo Jun on Bloomberg.com.

In a recent research note, Whitney wrote, “The real harrowing days of the credit crisis are still in front of us and will prove more widespread in effect than anything yet seen. Just as strained liquidity pushed so many small and mid-sized specialty finance companies to beyond the brink we believe it will do the same with the U.S. consumer.”

Continue reading " Credit Crisis Viewed As Extending Into 2009 " »

The government home price index that is considered to be the most comprehensive reading of the U.S. market posted the sharpest decline in its 17-year history in according to an Associated Press story. Analysts say the housing problem has yet to bottom out.

The Office of Federal Housing Enterprise Oversight said that home prices fell 3.1 percent in the first quarter compared with the same time last year. Rapidly falling home prices in California, Florida and Nevada skewed national results.

The Standard & Poor’s/Case-Shiller index, another highly regarded index, revealed larger declines for major metropolitan areas. Analysts say, however, that the government index provides a more comprehensive reading of the housing market nationwide. This is especially true for Midwestern states that have been little affected by the real estate recession since prices never skyrocketed there.

Continue reading " Home Price Index Reflects Record Continued Decline " »

BBC News has reported that the Swiss bank UBS has sold loans valued at about $22 billion to Blackrock for $15 billion. The deal represents a $7 billion loss – almost one-third of their value – for UBS on those assets. The assets UBS sold include sub-prime, prime mortgage-backed securities and Alt-A mortgage loans.

To add insult to injury, UBS is also lending Blackrock $11.25 billion to help it finance the deal. UBS said that the move was "risk reduction," as a critical part of the firm’s ongoing financial restructuring after overexposure to sub-prime loans.

BBC’s business editor Robert Peston says that the cut-price sale of the assets were "not a notional accounting loss, but a real loss of hard cash." “My brain can't quite come to terms with the extraordinary financial implications of all this, even though the terms of the deal have been known for some time,” Peston added. “UBS has suffered a genuine, eye-wateringly large loss on the sale of assets it should never have accumulated, but is remaining exposed to those assets to the tune of $11.25 billion,” according to Peston.

Continue reading " UBS Suffers Loss Of $7 Billion On Sale Of Loans And Plans Sale Of New Shares At Discount " »

According to a cover story in the May 16, 2008 edition of USA Today, lower stock returns and falling home prices may make it more difficult to retire on a 401(k) or similar retirement account and the equity in your home.

Since the beginning of the year, Patty Stewart, a 49-year old resident of Redland, California , has seen the value of her 401(k) fall about 4 percent. In addition to minimized returns, Stewart was forced to reduce her retirement contributions to offset the rising cost of living expenses. Home prices in Stewart’s neighborhood are off about 25 percent over a two-year period, which means that it is not likely that she can rely on tapping her home equity to supplement retirement income. According to Stewart’s calculations, she will need $1.3 million to $1.5 million for retirement, which she says "doesn't seem like it's something that will ever happen."

Continue reading " How The Ailing Economy May Affect Your Nest Egg " »

Floyd Norris, in his May 16, 2008 New York Times column with the great title "Color-Blind in a Sea of Red Flags," asked whether any investor would want to invest money at a low interest rate to finance mortgages for risky borrowers who put no money down. Add to that scenario the further information that the lender had gone bankrupt because so many of these loans turned bad so quickly.

Unfortunately, this scenario is no mere hypothetical. Last year, Merrill Lynch put together a securitization exactly like that involving so-called piggyback loans.

Continue reading " "Color-Blind In A Sea Of Red Flags" " »

Layoffs in the financial industry come with almost every downturn. The latest round of such layoffs, however, is different. In fact, it is eerily quiet as some bosses now hardly say a word after people are fired, according to an article by reporters Louise Story and Eric Dash in the May 16th New York Times.

At Citigroup, Goldman Sachs and Morgan Stanley, the first clue that someone is gone can be the return of an email message from a former colleague’s inactivated corporate e-mail address.

Since last summer, banks worldwide have announced plans to cut 65,000 jobs. Exactly how many employees have been or will be eliminated, however, remains unclear. In the past, Wall Street typically made sharp reductions in their workforce all at once. After the 1987 stock market crash, for example, employees were herded into conference rooms and dismissed as a group. Today, companies are making many small cuts over the course of weeks and even months. Employees who have lost jobs and others vying to hold them say that banks are keeping employees in the dark about the size and timing of layoffs.

Continue reading " Stealth Layoffs Hit Wall Street " »

According to the numbers reported in USA Today on May 15, the mortgage crisis is worsening. Foreclosure filings were up 65% in April from a year ago, leading some analysts to warn that the disaster may not end before 2010. According to RealtyTrac, 243,353 homes were facing foreclosure nationwide last month, which amounts to roughly 2 percent of all homes. These latest numbers are the highest since the company began issuing foreclosure reports in January 2005.

Foreclosure filings rose for all but eight states. Those hardest hit by foreclosures include Arizona, California, Florida, and Nevada, states where subprime lending and escalating home prices were rampant.

Continue reading " Foreclosures In April Up A Surprising 65% " »

Cornerstone Ministries Investments, Inc., a Georgia-based company in the business of lending money to fund churches and/or faith-based organizations, filed for Chapter 11 bankruptcy on February 10, 2008 after apparently investing in speculative secular real estate ventures.

Cornerstone was able to lend money to churches by raising money through the issuance of Cornerstone stocks and bonds. Church-going consumers interested in making altruistic investments in the development of new churches were often the people investing in these stocks and bonds.

It appears that Cornerstone deviated from its core mission and branched out into secular, very speculative real estate ventures at the expense of its investors. Now that Cornerstone has filed for bankruptcy, the values of those stocks and bonds have plummeted, leaving the investors holding the bag.

Continue reading " Cornerstone Ministries Investors May Have Legal Claims Against Brokerage Firms Or Financial Advisors " »

According to opinion columnist David McPherson writing on ABCnews.go.com, certain unscrupulous financial advisers pitch a scenario to employees of major corporations. The pitch is quite attractive: You can retire early (while in your 50's), cash out your retirement plan, and live off 12 percent annual returns.

These brokers use unrealistic investments projections to convince prospects that they can retire comfortably when they are in their 50's. The brokers earn fees and commissions on millions of dollars simply by convincing employees to collect a single lump-sum payment in lieu of guaranteed monthly pension benefits.

In April, the Financial Industry Regulatory Authority (FINRA) launched an effort to warn employers and employees of early retirement schemes that “promise more they can deliver." Over the last two years, FINRA has disciplined two brokerage firms – Securities America Inc., and Citigroup Capital Markets Inc. – that had targeted employees of Exxon and BellSouth with similar schemes.

Continue reading " FINRA: Beware Early Retirement Scams " »

In the face of the myriad of problems affecting the financial world, Wall Street is embarking on a bold, and for it a mostly unprecedented, tactic. It is telling the truth.

According to Andrew Ross Sorkin in his Dealbook column in the May 13th edition of The New York Times, Kevin C. Griffin, the founder of the Citadel Investment Group, a twenty million dollar hedge fund, has put it rather bluntly: “We, as an industry, dropped the ball.” Mr. Griffin’s analysis is scathing: The investment banks gambled away money and jobs during the late great credit boom. The same bosses let the young, gung-ho traders take on too much risk and now we are all paying the price. In Mr. Griffin’s view, however, the answer is simple. The entire financial industry needs to change its attitude and perhaps accept greater regulation.

Continue reading " Fixing Wall Street? " »

Although the figures remain relatively small, mortgage delinquencies have now spread beyond subprime borrowers to prime borrowers, according to a front-page article in the May 9 -11 edition of USA Today.

According to data from FirstAmerican CoreLogic LoanPerformance, approximately 2.3 percent of prime loans were 60 days past due in February, up from 1.4 percent a year ago. The foreclosure rate for prime borrowers is also up. Mortgage Bankers Association says that the rate of foreclosure filings for prime ARMS (adjustable-rate mortgages) rose from 0.41 percent to 1.06 percent. Prime ARMS constitute 15% of loans outstanding and 20% of foreclosure filings.

Continue reading " Mortgage Crisis Hits Prime Loans " »

Wall Street continues to shed jobs at breakneck speed, and financial firm employees cannot help but wonder how many heads will ultimately roll. The number of announced layoffs increases weekly. According to an article in The Wall Street Journal on May 10, more than 23,000 financial job cuts were announced in April. That brings the total announced job cuts for the first four months of 2008 to 49,825 –- nearly as many as the job cuts announced in all of 2007.

Lehman Brothers is expected to announce this week that it is eliminating about 5% of its workforce – or 1,425 jobs – on top of a previously announced 5% job cut. By the end of June, Morgan Stanley plans to cut 1,500 more jobs to bring its total layoffs to 4,500 or about 10% of its workforce. UBS announced last week that it will cut 5,500 jobs, including 2,600 investment bankers. Finally, no one knows how many Bear Stearns employees will be laid off once JPMorgan Chase acquires that firm.

In this uncertain climate, employees on Wall Street need to protect themselves. Even if your firm has a reputation of protecting its own, once you are targeted for layoff you are no longer within that circle of protection.

Continue reading " With 50,000 Layoffs So Far This Year, Wall Street Employees Must Protect Themselves " »

UBS AG will pay approximately $35 million to approximately 20 Massachusetts towns and cities that invested in the auction rate securities market. As reported by Forbes.com, the Swiss banking giant confirmed that it has entered into an agreement with the State of Massachusetts to return the amount of the investments. Massachusetts had been investigating UBS for misleading towns, cities, and other municipal entities by representing that auction rate securities were permissible investments under state law. That investigation began in February 2008.

The 20 or so municipalities that will be receiving the $35 million back from UBS invested from their general fund, which is regulated by a state municipal finance law that strictly prescribes what kind of investments can be made. According to Massachusetts Attorney General Martha Coakley, UBS misled the municipalities by representing that the securities were permissible investments under state law when in fact they were not.

Continue reading " UBS Will Pay $35 Million To Redeem Auction-Rate Securities Sold To Massachusetts' Cities " »

Jim Rogers, a co-founder with George Soros of the Quantum Fund, has contradicted his old partner and most Wall Street firms with his prediction that the global credit squeeze caused by US housing loan delinquencies is not nearing its end. According to Bei Hu writing on Bloomberg.com on May 8, Rogers, the chair of Rogers Holdings, said at a press conference in Singapore, “I doubt that we’re half way through the financial crisis. We certainly haven't hit the bottom as far as I'm concerned.”

“Most of the European banks and Asian banks haven't taken a huge write-off yet,” Rogers commented. “I suspect there are more write-offs to come in Europe and Asia,” he advised.

Continue reading " Jim Rogers Contradicts Wall Street -- The Worst Is Yet To Come " »

Wachovia has announced that its securities unit has received subpoenas from the SEC and various state regulators regarding its auction-rate securities practices.

In April, the SEC requested auction-rate securities information from various brokerage firms after many of the auction-rate markets froze, denying investors access to their funds. Recently, state securities regulators have also began focusing on the auction-rate problem and are coordinating their efforts to help investors “who can’t access funds that their brokers placed in these complex investment products,” according to an article by Kevin Kingsbury in The Wall Street Journal. North Dakota Securities Commissioner Karen Tyler, the president of the North American Securities Administrators Association, said “If violations are uncovered, then state securities regulators will seek appropriate remedies, including a much stronger commitment from Wall Street to provide their retail clients with an acceptable solution.”

Continue reading " Wachovia Receives Auction-Rate Securities Subpoenas " »

According to Jody Shenn of Bloomberg.com, Barclays Capital has reported that about half of subprime and Alt-A borrowers will soon either have little equity in their homes or will actually owe more on their mortgages than their homes are worth. This will put an additional $800 million of debt at greater risk of default.

New York-based analysts Ajay Rajadhyaksha and Derek Chen wrote, “Mortgage loans are moving underwater at a very sharp pace, far more than suggested by aggregate home price data.”

Continue reading " More Subprime And Alt-A Mortgages Heading Underwater " »

In an April 25 interview with CNBC, Nobel Prize Laureate Professor Joseph Stiglitz of Columbia University provided a bleak long-term outlook for the U.S. economy. "This is going to be one of the worst economic downturns since the Great Depression," Stiglitz advised. Stiglitz’s analysis is directly contrary to recent claims of Wall Street executives who contend that the worst is behind us. Of course, many Wall Street executives made similar claims last October when the firms recognized billions of dollars in losses.

According to Stiglitz, the primary cause of the recession is historically unique and thus perplexing those responsible for finding solutions. Previous recessions were caused either by excessive inventories or inflation. This downturn is caused by "badly impaired" banks and financial entities that will or cannot lend capital. Even borrowers who usually drive the country back to vitality remain uncertain as to what to do.

Continue reading " Internationally Famous Economist Disputes Wall Street's Claim That "The Worst Is Over" " »

According to a published report in Bloomberg.com, Morgan Stanley plans to lay off up to five percent of its work force during the remainder of 2008. These layoffs were driven by Morgan Stanley's recently announced quarterly losses, which were the first in its history as of a publicly-traded company. Morgan Stanley posted a $3.6 billion loss in the quarter ending March 31, 2008. The firm has already laid off 3,000 workers since October 2006.

Morgan Stanley CEO John Mack predicted in April that the credit crisis caused by the subprime mortgage and real estate market collapse would last "a couple of quarters" longer and that it was going to be "a difficult year for the Street."

As reported by Reuters, Ken Okada, a former stockbroker with Bear Stearns, was sentenced on Tuesday to three years probation, a year of home confinement, and fined $300,000 for his role in an insider-trading scheme.

Okada was one of 13 people charged in 2007 in what authorities have called the most pervasive insider trading rings since the 1980s.

Okada used information from UBS AG research reports, before the reports were made public, to execute hundreds of trades totaling $17.5 million.

After experiencing $17.3 billion in losses in the first quarter from its investment-banking unit, UBS announced on May 6 that it plans to cut 5,500 jobs, approximately half of which will come from its securities division. According to a report on Bloomberg.com, UBS said that its clients withdrew 12.2 billion dollars in assets more than they deposited in UBS's wealth management and asset management divisions during the most recent quarter. The most recent UBS job cuts are on top of approximately 48,000 other layoffs announced by the world's biggest banks and securities firms in the past year, mostly resulting from write downs and losses from the US subprime crisis.

Continue reading " UBS Will Cut 5500 More Jobs " »

According to a story by Stephanie Armour in USA Today on April 29, the most severe real estate recession in decades is far from over – the pace of foreclosures is rising, the fall of home prices is accelerating, and the pain is spreading to almost every major city.

The Standard & Poor's/Case Shiller home composite index of 20 cities fell by 12.7 percent in February compared with last year. This was the largest decline since the index was created in 2001. Nearly every major U.S. city was affected; all but one of the 20 cities – Charlotte – saw price declines. In fact, seventeen of those 20 metropolitan areas reported record annual declines. David Blitzer, the chair of the index committee at S&P, said. “There is no sign of a bottom in the numbers.”

Continue reading " Foreclosures Rising And Home Prices Falling At Unprecedented Rates " »

In addition to being the financial center of the South, Atlanta now has the dubious distinction of ranking second only to New York as a hotbed for investment fraud, according to a front page story in the April 25 – May 1, 2008 issue of the Atlanta Business Chronicle.

In April, the Securities and Exchange Commission (SEC) launched the “PAUSE” program to provide investors with regularly updated factual information, derived from investor complaints and other sources, about questionable email or telephone solicitations from securities firms. This program will shed light on a dark corner of the financial world attracted by Atlanta’s decade-long economic boom.

Continue reading " SEC: Atlanta Is A Hotbed Of Investment Fraud " »

Hedge funds marketed by Citigroup as “ideal investments for conservative retirees” have now lost 75% or more of their value. Citigroup’s Smith Barney brokerage unit raised hundreds of millions of dollars for those hedge funds – called Falcon and ASTA/MAT – from retail clients who were told that the fixed income funds were safe places to stash money. Now Citigroup is facing a huge outcry from injured customers and their brokers.

After weeks of intense internal debate, Citigroup is offering to cover some of the losses. This offer is tantamount to an admission that the hedge funds were misrepresented to investors.

Falcon invested in municipal bonds, mortgage-backed securities, bank loans and other debt instruments; ASTA/MAT emphasized municipal bonds. Each consisted of different funds that were launched periodically. Last year, as it geared up to launch new Falcon and ASTA/MAT funds, Citigroup encouraged the brokers at Smith Barney and Citigroup’s private bankers to pitch the funds to their best customers. Of course, they told none of these customers that one reason for the push was that Falcon had declined more than 10% and Citigroup wanted to stabilize it with new cash.

Continue reading " Citigroup Mismarketed Internal Hedge Funds " »

On April 23, Washington Post staff writer Dina ElBoghdady reported that “seven out of 10 troubled mortgage borrowers remain without a plan to work out their loans despite increased industry efforts to help them” according to a report released by a coalition of state attorneys general and banking regulators. The coalition represents 11 attorneys general, two state banking departments and the Conference of State Bank Supervisors.

The group collected data from 13 of the largest subprime lenders from October 2007 through January 2008 and found that lenders are being overwhelmed by their workload and are unable to keep pace with borrowers who fall behind on their payments. Even though 50,000 more loans were modified in January 2008 than in October 2007, 90,000 additional loans have since became delinquent.

"There still seems to be a disconnect between homeowners and their mortgage servicers," says North Carolina's deputy commissioner of banks Mark E. Pearce.

Continue reading " Borrowers Still Struggle To Deal With Delinquent Mortgages " »

More than $9 billion in auction-rate bonds issued by student loan agencies have left investors with bonds that pay less than the 0.76 percent interest rate of the one-month Treasury bill, reported Bloomberg.com on April 25. “It's hard to explain, to conceptualize or even understand how someone can borrow money and not pay you interest,”' said Mike Saunders, manager of student-loan bonds for Acton.

The problem materialized because of a formula designed to ensure that borrowers do not pay more interest on their debt than they receive from student-loan clients. The formula is based on a 12-month average of benchmark money market yields, which have fallen drastically as the Federal Reserve slashed its target rate for overnight loans between banks in September 2007.

Auction-rate bonds are long-term securities whose rates are determined through bidding run by dealers every 7, 28 or 35 days. When a sufficient number of buyers fail to bid, the auction fails and the rate resets to a level set out in the original terms under which the auction-rate securities were sold.

Continue reading " Adding Insult To Injury: Auction-Rate Bond Investors Get Almost 0% Interest On Securities They Cannot Sell " »