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Originally posted by liveandlearn
Then I went on to think about electronic stock certificates. I have had a growing concern about their safety. As of the first of this year there was some kind of change so that you can't get a paper stock certificate.
Sept. 18 (Bloomberg) -- An institutional fund run by Bank of New York Mellon Corp. designed to work like a money-market account fell to less than $1 a share after losses on debt issued by bankrupt Lehman Brothers Holdings Inc.
The $22 billion BNY Institutional Cash Reserves fell to $0.991 a share on Sept. 16, according to an e-mail sent by a bank representative to one client. BNY Mellon has ``isolated the Lehman assets in the fund into a separate structure,'' Ivan Royle, a spokesman for the New York-based company, said today in an e-mailed statement.
The fund invests cash deposited as collateral by clients who borrow securities from BNY Mellon, the world's largest custody bank. Lehman debt represented 1.13 percent of the fund's holdings, according to the statement. Royle declined in an interview to say whether investors withdrawing money from the fund would realize losses. The BNY Mellon fund, while not a registered money-market fund, is ``generally managed to be compliant with the investment-related provisions of'' U.S. law governing the accounts, according to a bank brochure.
Reserve Primary Fund, the oldest U.S. money-market fund, on Sept. 16 became the first in 14 years to fall below the $1 a share price, known as ``breaking the buck.'' Investors pulled 60 percent of their money from the $62.6 billion fund on Sept. 15 and 16 before withdrawals were delayed. "
'Buck-breaking' money market mutual fund returns initial $26B
NEW YORK (AP) — A money-market mutual fund that "broke the buck" amid a rush of orders to pull out cash has begun returning an initial $26 billion to investors who had been unable to access their money for more than a month.
The first in an unspecified number of distributions from the Reserve Primary Fund began Thursday with checks being mailed to retail-direct shareholders, Reserve Management Co. said. Payments to all other shareholders will be made by wire on Friday.
Each investor is getting about half their current account balance, the company said. It said all investors are being treated the same, whether or not they tendered redemption orders, and that the payout is being done on a pro-rata basis.
"This distribution marks a significant step in the process of liquidating the Primary Fund and distributing money back to shareholders," Reserve Management Co. President Bruce R. Bent said in a statement. "We are committed to making future distributions when more cash becomes available."
The fund had total assets of about $51 billion as of Sept. 30. It held $64 billion in assets on Sept. 12, before a soured investment in Lehman Brothers debt triggered a rush of institutional investors pulling out cash."