NASAA Says State Regulators Continue To Investigating Auction-Rate Securities Problems Affecting Investors

The North American Securities Administrators Association announced that a number of its members are continuing to probe complaints about auction-rate securities (ARS). They are also coordinating efforts to help investors whose money was placed by brokers in these complex investment products get access to their funds.

An ARS Task Force, comprised of state securities regulators from Massachusetts, Illinois, Florida, Missouri, Georgia, New Jersey, New Hampshire, Texas, and Washington all working in their individual jurisdictions, is investigating these ARS-related complaints.

NASAA President Karen Tyler, also North Dakota’s securities commissioner, says that regulators will seek the proper remedies to any violation. Tyler says that task force members are focused on determining whether any broker violations, including omission and misrepresentation, took place during the point of sale. She also stressed the securities regulators’ commitment to making sure that investors can access their funds.

In the wake of the subprime mortgage, many investors that were told that ARS were similar to money market accounts or making cash deposits now cannot touch their money because of ARS trade failures.

ARS Task Force head Bryan Lantagne says that many investors are have complained that they did not know that brokers had placed their money in auction-rate securities or, if they were aware that they had invested in ARS, they were not notified of the liquidity risks.

In New York, Attorney General Andrew Cuomo has subpoenaed 18 securities firms and banks to determine how brokers market ARS to investors. The companies subpoenaed include UBS AG, Merrill Lynch, Citigroup, Inc., JP Morgan Chase and Co., and Goldman Sachs Group.

Shepherd Smith and Edwards represents victims of investor fraud. Your first consultation with us is free.

Related Web Resources:

Credit Crisis Backlash as States Probe Auction-Rate Securities,, April 18, 2008
New Trouble in Auction-Rate Securities, NY Times, February 15, 2008