David Kirkpatrick

September 24, 2008

Reserve Fund Management Company sued …

for some serious financial shenanigans.

Wall Street is becoming one odoriferous cesspool right now. Anyone who thinks this financial crisis is going away anytime soon — read: months or years instead of days or weeks — is deluded, a moron or incompetent.

If political polling holds up, the GOP faces hell to pay whether or not the blame rests on one party, or any political party for that matter. The crisis and public perception are two different animals all together.

From the link:

By the time the Reserve Fund reported last Tuesday afternoon that its Primary Fund money market funds had ”broken the buck” — that is, were no longer worth a dollar a share — investors had already withdrawn billions of dollars from the fund.

Some market analysts assumed they had reacted to the panic sweeping the market. But a lawsuit filed in Minneapolis late last week by Ameriprise Financial offers another explanation: The suit claims the Reserve Fund tipped some big customers about its crisis in advance so that they could get their cash out before its losses became public.

 

According to the complaint, two senior Reserve Fund executives acknowledged during a conference call last Thursday with Ameriprise that big investors had received an early warning.

The Reserve Fund executives ”seemed surprised that Ameriprise had not also been tipped at the same time,” the complaint alleges.

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