Although it's still a far bigger scam than Bernie Madoff's $50 billion Ponzi scheme, it has gotten a relatively tiny amount of attention. I don't know why but I suspect it's because the victims of the $330 billion Auction Rate Securities (ARS) swindle -- in which money invested in supposedly cash-like investments in government bonds whose rates reset in weekly auctions -- are not bold-faced names like Kevin Bacon and Steven Spielberg.
Nevertheless, when the ARS scandal broke in February 2008, those investors found that their supposedly safe savings were frozen when the auctions to reset those rates stopped happening. My original post now has 7,343 comments from people who have been trying to get their money back. The good news is that some $200 billion worth of those securities have been unfrozen thanks to Massachusetts and New York officials, Bill Galvin and Andrew Cuomo, respectively, who fought on investors' behalf.
Nevertheless, there remain about $135 billion worth of these ARS that remain frozen. There are many individuals whose funds remain frozen with limited prospects of recovery. And there are companies and non-profits whose funds are still frozen as well. These include Vicor (NASDAQ: VICR) with $38 million of its funds tied up until 2010 at the earliest; Tufts Health Care has $30 million, which has half its cash tied up and no prospects for recovering it; and Five Star Quality Care (AMEX: FVE), with $75 million tied up in ARS and just just $39 million in cash.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
