Auction Rate Securities ("ARS") are long-term municipal bonds, corporate bonds or preferred stocks that are traded at auctions that set the instruments' interest rate and ultimately the price of the security.  Private investors who bought ARS were told that the securities were a safe money market alternative with a higher yield. But the investments also carry liquidity risk, and for that reason, ARS are not always appropriate, even for wealthy or small business investors.  Broker's who improperly recommended investing ARS to investors who cannot tolerate a risk to liquidity may be liable for a breach of the fiduciary duty owed by all brokers to their clients.

If you have questions about auction-rate securities, please feel free to give us a call at 1-800-306-6010 or contact us online.