In the News: Recent Developments
 

Saber Partners, LLC, a leading Wall Street financial advisory firm, offers an array of advisory, problem-solving and expert opinion services for the capital markets, with an expanded emphasis on auction rate securities.

Auction rate securities are long-term bonds or preferred stock whose interest rate or dividend yield is required to be reset periodically through an investor auction process. February 2009 marked the one year anniversary since $330 billion in “auctions” failed for investors and issuers. Despite over a year of activity, investigations and announcements, comprehensive solutions to the crisis have been difficult to find. Investors are still stuck holding an estimated $135-200 billion in securities for closed-end bond funds, student loan companies, state and local governments and not-for-profit corporations. Issuers believe they have few options. Brokers are in a conflicted position. Litigation is increasing.

Settlements and “agreements in principle” with banks, state regulators and the SEC are not a full resolution of the matter for either issuers or investors. Outstanding auction rate deals are still conducted the way they were before the massive failures, and are expected to continue for an extended period of time. Investor confidence and liquidity issues are not being addressed. Saber Partners will offer investors, issuers, brokers and counsel an independent perspective on explaining the causes of the continuing crisis, immediately managing the damage of the auction securities market and developing comprehensive short-term and long-term solutions including transparency, liquidity, restructurings and refinancings that are fair to participants. Saber has focused on solutions from the private sector to avoid or resolve litigation and does not rely on government bail-outs.

Saber Partners’ auction rate financial advisory, opinion and expert witness practice is led by Joseph S. Fichera, Senior Managing Director and CEO who first advised clients on problems with auction rate securities more than 20 years ago. As an investment banker and strategic financial advisor since 1982, he was also recognized by Institutional Investor Magazine for an innovative and equitable resolution of a previous crisis involving failed auction rate securities. Other Saber Partners expert opinion and advisory services personnel include former financial executives from some of the largest U.S. corporations, regulatory bodies and buy-side investment management companies.

Joseph Fichera’s and Saber Partner’s engagements and expertise includes:

  • Advisor to the U.S. Securities and Exchange Commission on its investigation of ARS 2004-2006;
  • Advisor to State of Hawaii (Department of Finance and Attorney General) on the largest ARS settlement in which the institutional investor will receive 100% of the principal amount of their investment. (The state had purchased approximately $1 billion of ARS at the height of the financial crisis.);
  • Advisor to the Commonwealth of Massachusetts, Secretary of State, concerning auction rate securities;
  • Expert witness to Luby’s Restaurants and The Westervelt Company, both of which resulted in favorable arbitration decisions for their cases;
  • Expert witness on behalf of the Tutor-Perini in the $37 million settlement paid by Banc of America to Tutor-Perini. See in particular: Tutor Perini Corp. v. Banc of America Securities, LLC, 842 F.3d 71 (1st Cir. 2016) Court of Appeals decision at Footnote 5.
  • Financial advisor to the 3rd largest municipal bond issuer during the immediate aftermath of the auction crisis.
  • Expert on the structuring of multiple types of auction rate securities, including auction rate preferred for closed-end funds, auction rate municipal and corporate debt and other differences between and among auction rate securities;
  • Frequent commentator on the auction rate securities market as an authoritative source by such news outlets as The New York Times,Bloomberg News,The Wall Street Journal,The Bond Buyer. Regularly appears on financial broadcasts including NPR’s Marketplace and Bloomberg Television; presenter on the auction rate securities crisis at The Bond Buyer municipal industry conferences;
  • Author of several well-received and often-quoted articles on auction rate securities and their alternatives; and
  • Familiarity, as a securities principals, with FINRA/MSRB suitability requirements, public offering and registration process and standards, including securitizations and structured securities;


More details on Mr. Fichera and other Saber members’ backgrounds can be found at: http://saberpartners.com/management/index.html

APPENDIX: Selected List of Recent Saber Citations in National Publications,
Articles and Awards

Saber Partners, LLC Calls for Municipal Market Regulator to Correct Auction Security Market Disclosure on its Web Site
November 27, 2012
http://saberpartners.com/press/pressreleases/pr_11_27_12.html

The Bond Buyer, MSRB Files Change on ARS, VRDO Transparency
By Andrew Ackerman, July 12, 2010
http://saberpartners.com/press/articlepages/BB07_12_10.html

Favorable Arbitration Decisions for Saber Partners’ Clients
http://saberpartners.com/press/pressreleases/pr_06_07_10.html
http://saberpartners.com/press/articlepages/ARS_04_15_10.html

The Boston Globe, “$135b still frozen by an early ’08 debacle, Later events eclipsed the auction-rate mess”
http://www.boston.com/business/articles/

Bloomberg News, VIDEO INTERVIEW: August 7, 2008
Saber’s Fichera Sees More Settlements After Citigroup: Video
https://www.bloomberg.com/video

The Bond Buyer, “Can ARS be Fixed?
By Andrew Ackerman, July 10, 2008
http://www.bondbuyer.com/article.html?id=20080709GUSXFDEG

Bloomberg News, “Wall Street’s Customer’s Man Fichera Unmasked Auction-Rate Market in 1980’s”
By Michael Quint, May 30, 2008
http://www.bloomberg.com/apps/news?pid=20601109&sid=ayt3SY18jeo4&refer=home

The New York Times, “How to Clear a Road to Redemption”
By Gretchen Morgenson, May 4, 2008
http://www.nytimes.com/2008/05/04/business/04gret.html?scp=6&sq=fichera&st=cse

The New York Times, “It’s a Long, Cold, Cashless Siege”
By Gretchen Morgenson, April 13, 2008
http://www.nytimes.com/2008/04/13/business/13cash.html?scp=25&sq=fichera&st=cse.

Bloomberg News, “Muni Regulator Plans Improved Auction-Rate Disclosure” (Update 2)
By Darrell Preston March 17, 2008
http://saberpartners.com/press/articlepages/BN_03_17_08.html

Bloomberg News, “Muni Regulators Seek Disclosure on Auction-Rate Bonds” (Update 5)
By Michael Quint, February 15, 2008
http://saberpartners.com/press/articlepages/BN_02_15_08.html

NATIONAL CONFERENCES DISCUSSING AUCTION SECURITIES

The Bond Buyer: “Municipal Credit Crunch Conference San Francisco” April 3, New York and March 26, 2008, “Managing the Damage”

The Bond Buyer, “National Municipal Derivatives Conference” May 20, 2008 New York, “Making Markets Work”

ARTICLES ON AUCTION SECURITIES AND ALTERNATIVES

“Making Matters Worse: Dangers of Auction Rate Securities”
http://saberpartners.com/oped/makingmattersworse.html

“The Advantages of Remarketed Preferred Stock”
http://saberpartners.com/oped/preferred-stock-4.pdf

RECOGNITIONS FOR RESOLVING FAILED AUCTIONS

Institutional Investor Magazine “Deal of the Year” award for repairing failed auction rate securities.
http://saberpartners.com/oped/dealoftheyearaward.html