LANSING - Attorney General Mike Cox today issued a warning as part of his ongoing efforts to protect Michigan investors who have purchased an investment product known as Auction Rate Securities (ARS) and are unable to fully access their funds.  Cox began investigating ARS investments in May 2008 after receiving complaints from consumers. 

    "Investors need to have confidence in our financial system, and that includes providing promised liquidity to consumers who purchased Auction Rate Securities," said Cox.  "I am committed to protecting Michigan citizens from losing their hard-earned money.  Today's announcement serves as an alert to Michigan citizens who may have invested in Auction Rate Securities to contact the Office of Financial and Insurance Regulation if they believe their investment was misrepresented to them."

    The sales practices related to ARS securities are currently the focus of a multi-state task force that includes Michigan.  The investigation into ARS practices is continuing and has already yielded numerous nationwide settlements with broker-dealers, including:

• Merrill Lynch;
• Morgan Stanley;
• UBS;
• JP Morgan Chase;
• Citigroup; and,
• Wachovia Securities.
  

    Cox urges any investors who have purchased ARS securities from any source to contact the Office of Financial and Insurance Regulation (OFIR) to register their complaint.  OFIR, by statute, is the securities regulator for the State of Michigan, and is working in conjunction with the Attorney General's office on resolving this issue.  OFIR will share all complaints with the Attorney General's office, and forward complaints to the North American Securities Administration Association (NASAA).  OFIR may be contacted by calling (877) 999-6442 or visiting www.michigan.gov/ofir .

    Earlier this year, the ARS market experienced numerous failures and collapsed.  The market failure prevented investors who had purchased ARS securities from accessing their funds.  Since the ARS failures, the Attorney General's office has received numerous complaints from investors.  In many cases, investors have complained that they were misled about the nature of ARS securities, and not provided with relevant information.  In particular, many investors report that they were informed that ARS securities were a liquid "money market" type investment that was suitable for such things as short-term cash reserves.  These investors often purchased ARS securities with short-term cash funds, which then could not be accessed. 
 

    For additional information please visit NASAA website: http://www.nasaa.org

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