Saturday, April 19, 2008

Brokers who peddled auction-rate securities (ARS): The Dirty Dozen and a Half

The length of the list of big-name brokerage firms that peddled auction-rate securities (ARS) to unsuspecting clients is just starting to sink in. There are a dozen and a half (18) names on it. And theses are just the firms that the New York State attorney general has recently subpoenaed. The Dirty Dozen and a Half:

  • UBS
  • Merrill Lynch
  • Goldman Sachs Group
  • Citigroup Inc
  • Raymond James Financial
  • First Albany
  • Wachovia Corp
  • Morgan Keegan
  • Piper Jaffray
  • AG Edwards
  • Deutsche Bank
  • TD Ameritrade
  • Lehman Brothers Holdings
  • RBC Dain Rauscher
  • Bank of America
  • JPMorgan Chase & Co
  • Morgan Stanley
  • E*Trade Financial

I still have a small IRA account at UBS that has only a little cash-cash still in it that I am in the process of moving to Fidelity, who is not on the list. Most of my assets are at Fidelity. I also have two small accounts at Muriel Siebert & Co, who is also not on this list.

About the only other major brokers I know of that are not on the Dirty Dozen and a Half list are Charles Schwab, ScottTrade, and Wells Fargo. Wells Fargo is being sued in California over ARS, but I do not think Wells Fargo has any retail operations in New York State. Charles Schwab appears to be "clean" on the ARS front but is being sued over problems with their YieldPlus ultra-short bond funds which also were apparently marketed as being "as good as cash."

-- Jack Krupansky


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