 |
Wachovia Securities HQ Raided
07-17-2008, 09:51 AM
|
#1
|
|
gone traveling
Join Date: Aug 2006
Posts: 994
|
Wachovia Securities HQ Raided
~
KANSAS CITY, Missouri (Reuters) - Securities regulators from several U.S. states raided the St. Louis headquarters of Wachovia Securities, part of Wachovia Corp on Thursday as part of a broad investigation into questionable practices involving auction rate securities, Missouri officials said.
Wachovia Securities HQ raided in auction rate probe | Reuters
~
|
|
|
 |
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
|
07-17-2008, 10:10 AM
|
#2
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 35,264
|
I don't understand what Wachovia is accused of here. What kind of "auction rate securities" thingy is being investigated?
Audrey
|
|
|
|
|
07-17-2008, 10:32 AM
|
#3
|
|
Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
|
 Quote:
Originally Posted by audreyh1
I don't understand what Wachovia is accused of here. What kind of "auction rate securities" thingy is being investigated?
Audrey
|
I don't know for sure, but I'm going to bet this concerns the "suitability" of ARS for individual investors.
Many of the wirehouses were selling these things as money market alternatives to individuals. Well, the auctions started getting blown out and people are now stuck with bonds they can't sell.
|
|
|
|
|
07-17-2008, 10:33 AM
|
#4
|
|
Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
|
Various brokers sold "auction rate securities" as a higher yield "equivalent" to a money market. They were very liquid until the credit crunch hit late last year. If there are no bidders, the current holders are forced to keep the security until the next auction at usually a very juicy interest rate. The problems come in when someone needs their cash or just panics at the sudden loss of liquidity.
It's all very clear in the prospectus but who reads them? The unhappy clients have called their local AG and complained about being mislead by the full service brokers that "forced" them to buy the "auction rate securities." Their claim was that they were told they were as liquid as a regular money market.
So far, no one has lost a penny that I am aware of except those that sold at distressed prices on the secondary market.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
|
|
|
|
|
07-17-2008, 10:38 AM
|
#5
|
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
|
the ARS news was pretty funny last year
read of a story of someone with an $850 million inheritance who put it all into ARS on advice of some wall street bank and couldn't get any money out. forgot if he sold for a loss or what.
|
|
|
|
|
07-17-2008, 12:04 PM
|
#6
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by saluki9
I don't know for sure, but I'm going to bet this concerns the "suitability" of ARS for individual investors.
Many of the wirehouses were selling these things as money market alternatives to individuals. Well, the auctions started getting blown out and people are now stuck with bonds they can't sell.
|
Yeah, just like the Schwab Yield Plus fund was a "high yield alternative" to money market funds even as they lost 30% of their NAV in less than a year.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
|
|
07-17-2008, 12:21 PM
|
#7
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 35,264
|
Wow - I guess I missed the whole ARS thing last year.....
Thanks for enlightening me.
Audrey
|
|
|
|
|
07-17-2008, 02:15 PM
|
#8
|
|
Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
|
The ARS market is starting to loosen up. The people that didn't panic will soon have access to their money. They will then miss the yield they've been getting.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
|
|
|
|
|
07-18-2008, 06:33 AM
|
#9
|
|
Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
|
Quote:
Originally Posted by 2B
The ARS market is starting to loosen up. The people that didn't panic will soon have access to their money. They will then miss the yield they've been getting.
|
And the people who couldn't wait and sold at a 25% discount will now sue claiming they were misled.
|
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
|
| Thread Tools |
Search this Thread |
|
|
|
| Display Modes |
 Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|
