NEW YORK (Reuters) - Ohio Attorney General Marc Dann is considering bringing lawsuits on behalf of state funds that invested in the now nearly frozen auction rate securities market, he said on Wednesday.
"We're actually looking into those today," Dann said at the Reuters Housing Summit in New York, revealing he was at the beginning stages of learning how his state had been affected by tie-ups in the securities.
Auction rate securities -- debt instruments once touted as highly liquid, short-term tools for cash management -- have been caught up in the credit crunch and are failing to attract bidders. As a result, institutional investors, government funds and corporate treasurers who bought them have found cash they once thought to be readily accessible is tied up indefinitely.
"There are potential disclosure issues," Dann continued. "They've been kind of treated as a cash equivalent. My guess is that somebody in our ... state government bought them."
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Emily Chasan; editing by Jeffrey Benkoe)
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