The Second Circuit recently upheld a $400 million arbitration award award against Credit Suisse in connection with auction-rate securities collapse. Well, it wasn’t exactly in connection with the collapse of those securities, it was really about how Credit Suisse brokers told the claimant that it would invest the money only in federally-backed student loan securities.
Instead, Credit Suisse invested the money into risky auction rate securities. This isn’t uncommon. From experience, I can tell you that brokers switch investments and classes of investments constantly, and like here, not for the better.
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