On September 21, 2009, Missouri Secretary of State Robin Carnahan announced that her office had finalized a consent order with JP Morgan Chase & Co. related to the firm’s marketing and sale of auction rate securities (ARS) to Missouri investors.
According to the press release, Missouri investors will receive more than $28 million. In addition, JP Morgan will pay $86,000 to the Missouri Investor Education and Protection Fund, which is used to educate Missourians about potential investment fraud and other fraudulent schemes.
JP Morgan, like many of the other investment firms across the country marketed auction rate securities as “safe,” “liquid,” and “same as cash,” when, in fact, the investments were subject to the willingness of many of the same firms to provide the necessary liquidity to sustain the auction rate securities market. As these firms’ liquidity began to diminish in late 2007 and early 2008, they became unable to support the market with the necessary liquidity. As a result, in mid-February 2008, the auctions failed and investors were stuck holding long-term and perpetual investments that paid short-term interest rates.
The Kueser Law Firm represents investors in securities arbitration and litigation. If you were sold Auction Rate Securities and your positions have not been redeemed or repurchased, you should contact an attorney to discuss your rights. Feel free to contact us if you have any questions or would like additional information.