Auction-Rate Securities: Still Stuck After All This Time

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Despite the happy headline reading "Auction-Rate Securities: How to Get Unstuck: you probably can't get unstuck. The secondary market for auction-rate securities has all but dried up as the issuers facing the highest interest rates have refinanced. By the time you get to the end of this Business Week story you'll find the sad tale of John Tierney, who was told by Smith Barney that he couldn't sell his auction-rate securities.
In other news, investors in auction rate securities have filed a suit against Goldman Sachs. The lawyers representing the investors say "Goldman Sachs misrepresented the securities as cash alternatives, which turned out to b"e liquid solely because of artificial manipulation of the auction market.

Auction-Rate Securities: How to Get Unstuck
[Business Week]

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