Muni Regulators Seek Disclosure on Auction-Rate Bonds (Update5)

[kickysnana]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aV.CZs6ShWV8&refer=us
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Banks including Goldman Sachs Group Inc. and Citigroup Inc. allowed hundreds of auctions to fail this week after they were unable to attract bidders and decided to stop buying unwanted securities. Investors had come to rely on the banks to prevent failures by submitting their own bids, without ever knowing how much dealers stepped in to support the market or the range of offers at auctions.

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Banks stopped buying the securities for their own accounts to prevent failures as investor demand for the bonds faded at the same time as banks' financial health came under pressure from $146 billion in credit losses and writedowns from subprime mortgage securities.

Regulators, who have allowed dealers to retain control of basic information in the market and manipulate prices at auctions even after the Securities and Exchange Commission fined banks in a settlement over bid-rigging two years ago, are calling for more disclosure now as the failures squeeze borrowers and investors alike.

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Investors have few publicly available sources of information on yields of auction-rate securities, beyond indexes published on the Web site of the Securities Industry Financial Markets Association, the bond market's trade group. The indexes are based on securities whose rates reset on Tuesday or Wednesday, and are published with a lag. The most recent indexes are for Feb. 13.

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Ye old pig in a poke.