Cos. Had Misconceptions About ARS Market: Survey

Law360, New York (June 30, 2008, 12:00 AM EDT) -- Most companies that invested in the now-defunct auction rate securities market had assumed that they could fall back on Wall Street banks if they faced a credit crunch, according to a liquidity survey.

The Association for Financial Professionals, which released its research on Monday, found that 86% of investors that held auction rate securities incorrectly believed dealers would support auctions if bidders did not materialize.

Auction rate securities are bonds and preferred stocks with interest rates or dividends that are reset periodically through an auction....
To view the full article, register now.