According to the NY Time, Reserve Fund is being sued by Ameriprise Financial

because they tipped off other big customers [but not them].

http://www.nytimes.com/2008/09/23/business/23funds.html?ref=business

because they tipped off other big customers [but not them].

http://www.nytimes.com/2008/09/23/business/23funds.html?ref=business

"And the federal district judge handling the Ameriprise case in Minneapolis, Paul A. Magnuson, imposed a temporary restraining order on Friday evening that prevents the Reserve Fund from permitting any further withdrawals from several of its largest funds." 

http://www.nytimes.com/2008/09/23/business/23funds.html?ref=business

Minneapolis Star Tribune reports that broker Ameriprise will make its clients invested in the Prime fund whole.  Talk about a great broker, putting their customers first!

http://tinyurl.com/4kjq6u 

Perhaps TradeKing could unfreeze its 800 customers' assets currently unredeemable due to issues at The Reserve.  After all, the government now guarantees all The Reserve MMF's except Prime.

TDAmeritrade  this morning also putting clients first (from Marketwatch):

SNIP

After its clients were stung by the one of the largest money market funds falling below $1 a share, TD Ameritrade Holding said Wednesday that it will spend as much as $50 million to make sure they suffer no losses.

The sense of entitlement astounds me.  Did I read senator correctly, that he is asking TradeKing to participate in his bad investment?  Or are you trying to borrow margin against an unpriced investment?

Should my 401K be making me whole because I took a 29% loss after leaving a money market fund?  The 401K they swept my money into a money market which declared credit risk from "sub-prime" loans and Fannie Mae and Freddie mac mortgage backed securities.  I was appaulled I was not allowed to hold cash (which TradeKing allows).  I felt I had no choice but to flee away from a money market investment threatening untold risk to a risky investment.

Senator, did you read your money market fund prospectus?  What risks did it declare?

I don't think TradeKing's commission is high enough to give anyone an implied credit default swap, which is kind of what is being asked for.  The restraining order applied to multiple Reserve funds because it is a judge's order against Reserve Funds the corporation.  I believe the corporation is liable.  http://www.signonsandiego.com/uniontrib/20080923/news_1b23money.html

Again, I ask people to do due dilligence and read their money market descriptions and prospectuses.  

Treasury secretary Paulson asked taxpayers for $700 billion to buy illiquid bad debts.  Paulson has said money markets are clogged with these illiquid assets (bad debts).  The government may buy these debts at a discount, well below institutional fantasy illiquid prices.  Are investors expecting TradeKing to pay what the government doesn't pay?

I didn't trust money market funds.  So I am glad TradeKing did not sweep my funds into one.    

 "The 401K they swept my money into a money market which declared credit risk from "sub-prime" loans and Fannie Mae and Freddie mac mortgage backed securities.  I was appaulled I was not allowed to hold cash (which TradeKing allows).  I felt I had no choice but to flee away from a money market investment threatening untold risk to a risky investment."

That's awful.   For a while I've fretted  for family members in 401ks without a decent cash option.

In my case, I selected the US Treasury MMF for my sweep at Tradeking long ago.  Didn't occur to me I'd be frozen out of my money because of a fund I didn't select.    

Marketwatch had an article on this mess a few days ago that has a few dozen comments (link below).  Mostly investors ventilating, but some calls to write to SEC, elected officials.   

 The latest, as Prime fund liquidates.  No communication on fate of US Treasury or other MM funds, or on whether Reserve will participate in Treasury guaranty program for money market funds.   

http://www.bloomberg.com/apps/news?pid=20601213&sid=a1vTYCRC7ET8&refer=home

No word yet on my shares in Reserve Funds' US Treasury Money Market Fund.
This fellow sufferer, quoted in Bloomberg, is wondering what I'm wondering.  

SNIP 

"Opting for what he thought was one of the absolute safest alternatives for cash, Memphis-based bond trader Matt Kamler moved his personal funds into a Reserve money-market fund invested exclusively in U.S. Treasuries last year. He feared other money market-funds would be caught with hard-to-value assets.

Kamler wonders if the company can survive, and if it doesn't, what will happen to his money.

``If this puts the Reserve under, where does that put me in line,'' Kamler said. ``Would I be another creditor?''

Anyone else been able to redeem their shares especially from the Interstate Tax-Exempt fund. I called TK to get an estimate on how long it has taken for the last few redemption, but they had no clue and could offer no assistance. It's been over 7 days for me now.

My Reserve US Treasury MMF shares look like they've been redeemed this morning.

Best of luck to those still waiting.  

Ok, after many phone calls and emails, several of which were to the Securities and Exchange Commission, some progress was finally made as follows.

I recieved a call this afternoon from Bruce Bent, CEO of the Reserve Funds, about the status of the Interstate Tax Free Fund distribution.  The following is a summary of our conversation:

Due to the breaking of the dollar on the Primary Fund, the Reserve had a run on all their funds.  They therefore froze payment of all distributions as of a certain date (he indicated mid-Sept, but did not give an exact date).  A large portion of the fund is now sitting in cash/1 or 7 day put provision variable rate demand notes.  The Reserve tenatively plans to distribute these proceeds sometime before the end of November.

A portion of the portfolio, Mr. Bent could not give an exact percentage but per the prospectus it looks like a max of 10%, is in longer put provision variable rate demand notes.  These notes put provisions can range from a few months to up to 18 months.  This part of the portfolio is essential frozen until either: 1. The credit crisis is resolved (ie. no one will buy these right now without a low ball offer that would break the $1 NAV) or 2. The notes mature which can take up to 18 months.

Bottomline - it sounds like the majority of the Interstate Tax Free fund will be distributed to shareholders by the end of November.  But a portion of the portfolio proceeds may be much longer in coming, dependent upon when the credit markets unfreeze. 

Again, this is just per a brief 5-10 minute phone conversation I had with Mr. Bent, so no guarantees here that it will work like this; but I came away from the conversation feeling generally somewhat better about what was going on.