Sense on Cents

My heartbeat accelerated this morning upon reviewing page 2 of The New York Times. As I perused the headlines of the lead articles, I saw Investors Without a Lifeline in the Sunday Business section. Could this be the article that would fully expose the fraud involved in the sales and marketing of Auction-Rate Securities? Would investors finally get some satisfaction in publicly exposing all those involved in Wall Street’s greatest fraud?

While I am heartened by any public attention regarding the ARS fiasco, this report by The New York Times falls woefully short. Let’s reveal color and analysis that The New York Times and every other credible business outlet should feel obligated to provide.  In doing so, I can only hope that investors still holding ARS, whether sold by Raymond James or any other entity, can move one step closer to a return of their capital along with interest and penalties.

The New York Times hardly lands a blow on Raymond James in the ARS fiasco. In fact, I would define the reporting as the equivalent of a ‘kiss’ in what should be a brawl. The reporter, Gretchen Morgenson, does not even venture to ask who is supposed to protect investors before making an investment or a lifeline after the fact. The answer to those questions are the SEC and FINRA (Financial Industry Regulatory Authority).

While Raymond James has $800 million in ARS exposure, that figure only represents approximately .5% of the total outstanding exposure. Why does Ms. Morgenson focus strictly on Raymond James and not the entire industry? (more…)