Too bad they didn’t share this info with everyone else:
At least five major Wall Street firms warned the Commonwealth in January that a $330 billion slice of the bond market was in distress, e-mails and presentations from those firms show. They were warnings that most individual investors did not receive before the market collapsed on Feb. 13.
The troubled bonds were auction-rate securities, investments that have prompted two regulatory actions in Massachusetts against UBS Financial Services Inc. The Massachusetts Securities Division last week charged UBS with fraud for failing to warn individual investors and its own brokers that the market was on the brink of failure.
Now it appears that several other firms - JP Morgan Securities Inc., Lehman Brothers, Morgan Stanley, Bear Stearns Cos., and Merrill Lynch & Co. - also knew the auction-rate market was in trouble ahead of time. In the weeks leading up to the collapse, each of the firms told the state treasurer’s office that the market was faltering, sometimes in dire terms, according to documents obtained in a public records request.
Massachusetts Treasurer Timothy P. Cahill said the investment banks were doing their job by warning the state of the turmoil in the auction-rate market. “The fact that they weren’t providing the same advice to smaller investors, and even some smaller state entities, is unforgivable, really,” he said.
Investment involves risk.
Jennifer, I’m nominating you:
1- to replace Ben Bernanke.
2- for a Nobel Prize in economics
3 - as GWB’s next press secretary
4 - for a MacArthur genius grant
Investors of limited means will not put you in a jail cell with Paco or Dushawne, who just might not like you for a multitude of reasons. See, regulation (with the fear of enforcement) works!