Let the Finger Pointing Begin

By Securities Law on Sep 8, 2008 | In General

On the day of the historic (or at least pretty darn huge) Fannie/ Freddie government bailout—the finger pointing has begun about the other big debacle confronting the economy—the Auction Rate Securities mess. In a far-reaching article on Bloomberg.com today, authors Michael McDonald and David Scheer try to ask SEC Chairman Christopher Cox what went wrong. He declined to be interviewed. Ditto for Mary Schapiro the CEO of FINRA. Massachusetts Secretary of State Bill Galvin did speak to Bloomberg—and it was a doozy. He said “It’s obvious they missed an opportunity..they could have raised a red flag”. His words are in the article echoed by the “usual suspects” of Plaintiff’s lawyers, but the point is well-taken. As McDonald and Scheer pointedly note:”[f]ederal regulators didn’t stop brokers from selling the long-term securities to individuals as alternatives to cash late last year when credit markets seized up, though they knew dealers routinely propped up the bonds”.

The full article can be found at http://www.bloomberg.com/apps/news?pid=20601109&sid=aNpaeNekCTe4&refer=home#

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.

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