Auction Rate Securities Fraud Lawyer
ARS Fraud: Who’s Involved?
Over the last several months, the stock market has continued to slow in growth, leading to the failure of auction-rate securities (ARS) investments in February. While investors were aware of the struggling stock market, large brokerage firms around the world had misrepresented the stability of auction-rate securities to their clients. The brokers and other ARS issuers misrepresented the risks and liquidity of these securities, referring to them as “cash equivalents” in a variety of different communications with investors, the press, and in other written materials.
The ARS market crashed in February after major brokers announced that they would discontinue purchasing ARS for their accounts. Their purchase of ARS had been keeping the auctions from failing all along and had helped the securities to remain liquid. Without these purchases, the ARS market plummeted. Not surprisingly, investors became enraged when brokers did little to take responsibility for the failure of these securities. Over $300 billion in ARS became illiquid, causing incredible economic concerns for the investors involved.
Recently, the state and federal governments have stepped in to investigate the auction-rate securities fraud that has left so many investors with failed investments. The brokers included in these investigations include many prominent banking institutions, such as:
- UBS
- J.P. Morgan Chase
- TD Ameritrade
- Citigroup
- Wells fargo
- Wachovio
- Marrill Lynch
- Morgan Stanley
If you have suffered economic hardships due to the negligence and dishonesty of a brokerage firm or other financial institution, it is in your best interest to seek legal guidance. A skilled auction-rate securities lawyer will be able to evaluate your case and answer your pressing legal questions.
For more information about your legal rights, call an
auction-rate securities lawyer at 1-800-220-9341.