HONOLULU (HawaiiNewsNow) - Maui County has sued financial giant Merrill Lynch over access to $32 million invested in student loan auction rate securities. The suit was filed Friday with the United States District Court in Honolulu.
The county said Wednesday that Merrill Lynch sold it the securities with the understanding they were safe, short-term, liquid investments. Maui Mayor Charmaine Tavares says assurances made by company at the time of the investment turned out to be false.
"The County of Maui was told that the investments could be easily accessed, just like cash," said Tavares. "We are seeking justice for the taxpayers of Maui County."
County officials say about $44 million in the securities were purchased through Merrill Lynch. They say now the county owns $32 million of the securities that are not liquid.
"Maui County made a number of attempts over a long period of time to resolve this problem so Maui County could regain access to its money. Maui County reached out to Merrill Lynch to resolve this problem, but Merrill Lynch was not responsive" said Joachim Cox, an attorney with Goodsill Anderson Quinn & Stifel, who are representing the county in the action.