Auction-Rate Securities Lawyers

Auction-Rate Securities in the Now Liquid Stock Market

In recent weeks, the stock market has been showing signs of slower growth, indicating the possibility of a recession. This change from a bull to bear market was instigated by the housing crisis, which hit the financial market the hardest. As a result, the auction-rate securities sector has also seen its share of problems. The recent failure of the market has disgruntled investors, many of whom have lost upwards of $3 million dollars, asking for an investigation into the representation of auction-securities markets by large brokerage firms.

The anticipated "tsunami" of lawsuits includes some the most respected firms on the street: UBS, Merril Lynch, Citigroup, and Goldman Sachs. The victims contend that brokers misrepresented the risks inherent in these very complex investment vehicles, falsely touting them as being similar to money market investments. Consequently, the Security and Exchange Commission (SEC) has begun an investigation, requesting to names of every person or organization that has made an investment into the market.

The Auction-Rate Securities market has grown into a $200 billion sector since Goldman Sachs originally introduced the idea in 1988. The Dutch-Auction that resets interest rates every month has turned the investment vehicle into a high-yield, short term asset for high-net worth individuals and large companies. But the bank's failure to buy out the failing market, as usual, has left several of these investors high and dry.

This type of fraud is unacceptable for upholding the integrity of American business. Misleading investors and convincing them to put large sums of money into a volatile liquid market is grounds for immediate litigation.

If you or someone you know has become a victim of investment fraud, contact the Auction-Rate Securities lawyers of Williams Kherkher at 800.220.9341 to find out more information today.