Auction Rate Securities Fraud Lawyer

The Problem of Auction Rate Securities

Most of us understand that the current stock market is showing signs of slow growth. The recent housing and subprime loan crisis has been the most publicly obvious sign of trouble in the economy; however, the housing market is not the only spectrum of the financial world that has been having problems. The collapse of the $330 billion auction rate securities (ARS) market – due in part to the backlash of the housing crisis – has cost investors both in terms of investment value and investment liquidity.

Understanding how ARS auctions fail is an important part of fully understanding what has caused this seemingly safe investment to throw many investors into financial ruin. In February 2008, major brokerage firms declined to act as bidders of last resort at auction. The faltering demand for auction rate securities, which had been masked by the bids of broker-dealers, was simply not enough to allow successful auctions to take place. As a result, hundreds of auctions failed within weeks, causing the entire market to freeze up.

Investment firms have grossly misrepresented the stability of auction rate securities to their clients, leading many to seek legal action after losing liquidity in their investments. If you have been left holding auction rate securities that you are unable to sell, it is in your best interest to contact an attorney immediately. A skilled lawyer will discuss your legal options with you and help you throughout the arbitration process. The misrepresentation of these action rate securities is a type of fraud and brokerage firms should be held accountable for their unacceptable actions.

If you’ve been the victim of misrepresented investments, contact an auction rate securities fraud lawyer today by calling 1-800- 259-9010.