Stockbroker Fraud Attorneys

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Auction Rate Securities

Colling, Gilbert, Wright & Carter is currently representing fraud victims who purchased Auction Rate Securities from well-known firms Goldman Sachs, Merrill Lynch, Lehman Brothers, Oppenheimer and UBS AG. Many of these firms have recently notified their clients who purchased "Auction Rate Securities" the market for the bonds is frozen. If you have purchased. If you've purchased any of these securities and are now being denied access to your money, click here for a free stockbroker fraud case evaluation.

Large brokerage firms, including Goldman Sachs, Lehman Brothers, Merrill Lynch and UBS marketed these instruments as a safe and liquid. The firms are now telling some clients the market for these securities is frozen and they can't have their cash.

The banks and brokerages typically market these securities to corporations and wealthy individuals as safe alternative to cash that pays a higher rate of interest. However, the bonds are long-term securities that are auctioned on a weekly or monthly basis to set rates and provide liquidity. However, recently the auctions have failed and there is no ready market for the investments.

The biggest investors in auction-rate securities are individuals and corporations because money market funds cannot own the bonds. Many bond fund managers also shy away from the securities because of the uncertainty. Brokerage firms are not legally obligated to make a market in auction securities, or give clients a price even if there is not one in the market. However, if your broker or bank representative has pitched auction-rate securities as liquid, super-safe investments with interest rates superior to money-market funds and you have been denied access to your funds, you may have a claim against the offending financial institution.