FINRA Investor News
January 27, 2009 |
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Investor Information |
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As of the end of 2008, FINRA had announced agreements in principle with 8 firms to settle ARS violations that provided for the repurchase of approximately $2 billion in such securities from investors affected by the developments leading to multiple auction failures earlier in the year. The firms also agreed to pay several million dollars in fines. FINRA is continuing investigations of numerous other firms.
Read about the FINRA Settlements
The Securities and Exchange Commission also announced, in December 2008, settlements with 3 firms providing for the repurchase of nearly $30 billion in ARS. The SEC had previously reached agreements in principle with multiple other firms.
Read about the SEC Settlements
FINRA had issued guidance to investors caught in the auction failures to explain some of the options available to them in the event their ARS investment became illiquid. In addition, the alert also discussed what happens when an issuer makes a call for a partial redemption.
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During 2008, many investors found themselves holding unexpectedly illiquid auction rate securities (ARS) because of developments in the credit market that resulted in many ARS auction failures. Several hundred investors initiated arbitration claims based on these events. To facilitate the handling of these claims, FINRA announced modifications to its arbitration process.
The first modification offers qualifying investors the option of having their claims heard by a three-person panel of arbitrators, none of whom would be affiliated with a firm that recently sold auction rate securities.
Read the Press Release and related information.
The second modification sets up a special arbitration procedure (SAP) program for the recovery of consequential damages related to investments in ARS. Customers entitled to file for consequential damages under ARS-related settlements that firms have concluded with FINRA or the Securities and Exchange Commission (SEC) may use this special process at their option.
Read the Press Release and related information, including frequently asked questions about the SAP. |
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Podcast: Minimum Required Distributions—Suspended for 2009Congress took action in December 2008 to suspend the requirement to withdraw a minimum amount from qualified retirement accounts such as 401(k)s and 403(b)s during 2009. If you are 70 1/2, or will be in 2009, it's important to understand the ramifications of the suspension and how it might affect your retirement income.
Listen to the Podcast |
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Past Issues of Investor News Available
In response to numerous requests, previous issues of Investor News are now available on our Web site. |
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