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New York State Attorney General Andrew Cuomo wants the job his father used to have. He wants to be governor of the Empire State. He wants to fight evil. He want to bring the unrepentant to justice.

Cuomo has launch a big probe of the auction-rate mess. He plans to probe to know how a market which operated seamlessly since 1985 suddenly shut down. He wants to know why major banks and brokerage houses walked out on making this market. And, most of all, he want to know why investors and corporations were told that auction-rate securities were virtually the same as cash. The paper had a little bit better interest rate than a savings account, but people could take their money out at any time. That is until they couldn’t.

According to The Wall Street Journal "Mr. Cuomo’s office sent subpoenas to 18 institutions on Monday and Tuesday seeking information on their auction-rate-securities." That would include operations like Citigroup (NYSE:C), Merrill Lynch (NYSE:MER), and Morgan Stanley (NYSE:MS). As if they did not already have enough problems on their plates.

There are a growing number of private lawsuits against brokers which claim, among other things, fraud. When the securities were sold, many people were not told that the auction-rate market might lose its liquidity.

To a large extent, this is a case about reading the fine print. Most, if not all, of the literature given to brokers and their clients made its clear that this paper was not truly cash. That may have been buried deep in the documents, but it was there.

Fool me once and you lose all of you money, But, did the firms really "fool" anyone at all?

Douglas A. McIntyre