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Some Auction Rate Securities to be bought back at discount

The Missouri Higher Education Loan Authority announced this week that it would begin buying back a portion of its auction rate securities at a discount on the Restricted Securities Trading Network.  See the related news stories in Forbes and the St. Louis Business Journal

This news is a mixed blessing for investors stuck with these or other auction rate securities.  While such a buy-back will finally allow them to escape from these investments, they will probably have to take a loss on the investment if it is bought back at a discount on a secondary market.  Many investors around the country were sold auction rate securities by major brokerage firms who incorrectly claimed they were safe, liquid, cash equivalents.  This has turned out to not be the case as evidenced by the collapse of the auction markets earlier this year.  Such sales practices can form the basis for claims of federal and state securities fraud among other causes of action.

If you are an investor who was sold Auction Rate Securities, and you would like to discuss your legal options with an attorney, please Contact Greco & Greco.

Posted by Greco & Greco on 05/09 at 07:23 PM
Auction Rate Securities (ARS)Bonds

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