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.

Continue reading Auction Rate Securities: $200 billion unfrozen, $135 billion to go

Auction Rate Securities: $200 billion unfrozen, $135 billion to go originally appeared on BloggingStocks on Wed, 31 Dec 2008 13:45:00 EST. Please see our terms for use of feeds.

Most Noteworthy: On an expected light trading day after Thanksgiving, Palm Harbor (PHHM) and Vicor Corp. (VICR) top today's list of downgrades.

• Palm Harbor Homes, Inc. (NASDAQ:PHHM) and Vicor Corp. (NASDAQ:VICR) were downgraded at Matrix USA due to valuation and the slowing demand for housing, Palm Harbor was downgraded to Hold from Buy and Vicor was downgraded to Sell from Hold.

Other Downgrades:

• Air France-KLM ADS (NYSE:AKH) was downgraded to Hold from Buy at Citigroup after shares were up in overseas trading after the company confirmed it was in merger talks with Alitalia.
• Journal Register Company (NYSE:JRC) was downgraded at Matrix USA to Sell from Hold due to the soft demand for print advertising and a decrease in circulation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst downgrades 11-24-06: Air France-KLM downgraded to Hold originally appeared on BloggingStocks on Fri, 24 Nov 2006 11:00:00 EST. Please see our terms for use of feeds.