MichaelNYC

Auction Rate Securities: Who's To Blame?

Chase caved - I still think they are pieces of crap and I for one hope I don't forget and hold it against them.

Auction Rate Securities: Who's To Blame?

Michael Steinberg - I try not to trust anyone (at least theoretically I know that's the correct behavior) still when an employee of Chase is involved it's a bit different. I would not buy these if a street broker offered them to me. At one point I even said “so this is like Chase commercial paper" and he said “yes”. The amounts are well over the FDIC limits so by keeping the money in a Chase MM I had to believe that Chase's credit would be ok and I did. It was a large sum and 97% of the cash on hand in this 501(c) , if this wasn’t a true “money market” just like the Chase MM, shouldn’t a Chase (Securities) employee say something? By the way, the branch didn’t seem to mind that a large sum went out of their account and went into AUS. I assume they were getting earning credits for the AUS also. It’s funny how Chase wants to be seen as a bank, yet make money and shaft their clients like the big boys on Wall Street. It’s really annoying how they behaved on this matter and I wonder if they think the clients won’t remember this in the future and hold it against them. When the Chase folks tried to be “helpful” and offer loans against the AUS, I told them to shove it. I hope they fold soon for their own good because eventually they will, given the other players folding, and they are just hurting themselves by protracting this.

DougM – what that a bank, can you tell me please which institution it was?

hooboy – you know, life’s busy and here’s a Chase employee… I was told the credit was insured munis, as to the liquidity he assured me that it was fine. In hindsight of course I’d act differently. Still this does not excuse their nondisclosure and as I wrote above their intermingling of Chase Bank and Chase Securities.

Auction Rate Securities: Who's To Blame?

Michael Steinberg - I don't know if you bought ARS for yourself or not, I'll assume you didn't. Happens to be I did. I have corporate and other accounts at Chase, and the sales person definitely marketed the AUS as cash, same as a Chase Money Market account except if you buy the 7 days lock up or the 4 week lock up, you’d need to manage you needs for those periods. No prospectus was given to me or anything else. In fact I had a substantial amount in a Chase MM account for years and this money went into AUS. It happens to be it was a 501 (c), and there's no question in my mind of what I was told. All of you who in previous comments on this article scream "buyer beware", should have been there and then you can talk.

If the Chase wants to be a bank it shouldn’t have sales people from Case Securities sit right next to my regular relationship manager and have that person have access to my Chase bank accounts to see how he can help me take money out of my case MM account and put it into AUS. I know of other Chase customers who were put into AUS as interchangeable vehicle for Chase MM or CD accounts. There was no disclosure, just the opposite. Sounds like somebody was making more money on the AUS, so that was being pushed.

I wonder why the others are forced to buy back the AUS and not Chase so far. As soon as the liquidity evaporated in AUS, the Chase thieves circled the wagons, it was almost comical, announced they couldn’t communicate about AUS by email only phone – it was pretty sad. As much as I don't like lawyers and AG Cuomo (or his father) I find that Chase’s behavior throughout the AUS saga was and still is very shabby and if it takes Cuomo to slap them around, unfortunately, so be it. I hope Chase is somehow not protected by the Fed for being the “good guys” on Bear. Nothing would surprise me anymore.