{"id":394,"date":"2008-08-19T21:11:11","date_gmt":"2008-08-19T21:11:11","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2008\/08\/bank_of_america_did_not_warn_s_1"},"modified":"2021-09-20T15:40:39","modified_gmt":"2021-09-20T20:40:39","slug":"bank-of-america-did-not-warn-s-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/bank-of-america-did-not-warn-s-1\/","title":{"rendered":"Bank of America Did Not Warn Small Investors About Auction-Rate Securities Crisis"},"content":{"rendered":"

\t\t\t\tDocuments reveal that Bank of America<\/a> told the state of California as early as late last year that there were problems brewing with the auction-rate securities market. The country’s largest retail banking firm, however, failed to warn smaller investors about potential trouble and continued selling the investments without providing any warning to these clients. <\/p>\n

In its presentation to the California’s treasurer last year, Bank of America<\/a> warned the state of a “significant dislocation” in the auction-rate securities market, as well as a drop in demand for the bonds. It also informed the State that corporate clients had engaged in “significant year-end selling” of the investments. The Boston Globe <\/em>obtained a copy of Bank of America’s presentation to California, as well as the presentation of other investment banks.<\/p>\n

Bank of America is the eighth-biggest issuer of auction-rate securities. It is one of the few brokerage firms that has yet to announce a settlement with state regulators related to the collapse.<\/p>\n

The retail banking firm told The Boston Globe <\/em>that its presentation to the state of California did not talk about the liquidity issues that would end up being at the center of the auction-rate securities collapse earlier this year. Upon closer scrutiny, however, Bank of America’s presentation appears to indicate the possibility of the market shutting down.<\/p>\n

Prior to the market collapse, California had some $1.4 billion in outstanding auction-rate securities. Fortunately, the state’s treasurer paid attention to the warnings it received from Bank of America and other investment advisers. By May 23, it had refinanced all except for $100 million of its auction-rate bonds. <\/p>\n

Related Web Resources:<\/strong><\/p>\n

Bank of America subpoenaed on auction-rate securities, derivatives<\/a>, BizJournals.com, August 8, 2008
\nInvestors sue Bank of America over auction rate securities<\/a>, Bizjournals.com, July 18, 2008 Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Documents reveal that Bank of America told the state of California as early as late last year that there were problems brewing with the auction-rate securities market. The country’s largest retail banking firm, however, failed to warn smaller investors about potential trouble and continued selling the investments without providing any warning to these clients. In […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3751],"tags":[],"class_list":["post-394","post","type-post","status-publish","format-standard","hentry","category-bank-of-america"],"yoast_head":"\nBank of America Did Not Warn Small Investors About Auction-Rate Securities Crisis — Investor Lawyers Blog — August 19, 2008<\/title>\n<meta name=\"description\" content=\"Documents reveal that Bank of America told the state of California as early as late last year that there were problems brewing with the auction-rate — August 19, 2008\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/bank-of-america-did-not-warn-s-1\/\" \/>\n<meta name=\"twitter:card\" 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