Monday, August 11, 2008
Back on line after a much needed week in Maui...
I wrote about the risk and impact of auction rate securities back in February and how young VC backed firms who had put their precious cash into ARS were suffering. By March Merrill, Citigroup and Morgan Stanley were being sued.
Now finally the SEC is getting involved and has "issued a formal order of investigation into whether various provisions of the federal securities laws have been violated over the sale of ARSs" and is responding to various subpoenas from state agencies.
Small comfort to the companies who faced a liquidity crunch as a result of listening to an ARS pitch.