"Florida Investment Pool's Bank Dealings Probed by SEC" writes Bloomberg. The article says, "Wall Street firms that sold mortgage-backed securities to a $30 billion pool run by the state of Florida for local governments are under investigation for fraud by the U.S. Securities and Exchange Commission. Lehman Brothers Holdings Inc., JPMorgan Chase & Co. and Credit Suisse Group AG may have misled officials overseeing Florida's Local Government Investment Pool in 2007 when they sold the securities without disclosing 'the risk and liquidity of investments,' the SEC said in an Oct. 17, 2008, letter to the State Board of Administration that runs the pool." It adds, "After the run on the fund, the state on Nov. 29, 2007, froze it, stopping all withdrawals. In December, Blackrock Inc., which was hired to advise the pool on its holdings, advised that it be split into two funds, with a new one created to hold assets tainted by the mortgage-backed securities.... Florida Prime, which now has about $5 billion under management, has eliminated two-thirds of its bad holdings, replaced managers, increased oversight and secured a AAAm rating from Standard & Poor's, the highest for a money fund." Also, see Smart Money's "Are Shrinking Money Funds a Bullish Sign?".

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