Recall that the market for auction rates securities (ARS) seized up at the height of the financial crisis, leaving many investors fuming. Indeed, the suddenly frozen market left some buyers with massive liquidity issues.

One of the biggest ARS players was UBS (UBS news), which was just hit with a FINRA arbitration decision requiring UBS pay one corporate buyer $81 million, to compensate for lost business when its cash was frozen due to soured ARS holdings. UBS says it will fight the award, but it may be a tough road. It is hardly the only firm being forced to make good on their ARS activities; critics contend the top banks marketed them as near-cash equivalents.

Wells Fargo (NYSE: WFC), for example, will buy back $34.6 million of auction rate securities from Colorado investors as a result of a settlement with the state. Goldman Sachs (NYSE: GS) has agreed to buy back $60 million of such securities from investors in Missouri. Nebraska is said to be wrapping up similar settlements with various firms.

We've seen such settlements with regard to individual investors as well. The suits keep on coming. BlackRock, for example, was recently sued over ARS issues by investors in some of its closed end funds. 

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