NASAA COORDINATES INVESTIGATIONS INTO AUCTION RATE SECURITIES
The North American Securities Administrators Association, the organization of state securities regulators, has announced that several of its members are coordinating investigative efforts into auction rate securities sales practices. Several investigations are currently underway under the auspices of an ARS Task Force, chaired by Bryan Lantagne, Director of the Massachusetts Securities Division. The investigations are focusing on supervision and sales practices particularly where investors are unable to access cash when the product was sold as a cash equivalent. According to NASAA, the investor complaints demonstrate a “pervasive problem.”
Our take: It is somewhat unusual for NASAA to commission an investigative task force on a particular issue. This type of coordinated effort will likely result in significant regulatory action.