Missouri . Securities regulators entered the St. Louis offices of Wachovia Securities, apparently to obtain information about a type of security that they sold, called "auction-rate" securities. As noted previously in this blog, they're a type of bond with a frequently resetting interest rate.
Although auction rate securities were thought by many to be liquid assets, the fact that they are bonds prevented them from always being sold at will. The market in them has tightened considerably of late, according to Wachovia: “While some liquidity is returning to parts of the (auction-rate securities) market, many securities are not immediately salable.”
Posted on July 18, 2008