Enlighten Me
Monday, April 13th, 2009
cartoon by YoSpilt
On the surface when one invests for their future it is important to understand what your investing in. Auction rate securities were suppose to be ultra safe bonds that were sold by financial firms as cash like securities. Without warning the auction rate market closed.
Who got hurt the most: municipalities, hospitals, universities and many other types of nonprofits. Cash flow suffered on two levels.
- First, organizations were locked out of accessing their money.
- Two, organizations needed to increase their borrowing to cover cash needs at higher rates.
Safe is suppose to mean that ones cash is secure.
If your organization was effected file a compliant with your state Attorney General and the regulators for the financial institution that provided the investment. Making them honor the terms of the bond as like equivalents takes work. If that does not work it may be time to reach out to an Attorney.
Do not let the delivery of the product be dependent upon outside influences. Hold the financial institution accountable to their actions to deliver upon what you bought.
