Following up on last week’s Blast from the Past (2018 Annual Wrap Up: The Real Game of Missing Money), we recommend one of the most important sections of that Wrap Up: Caveat Emptor: Why Investors Need to Do Due Diligence on U.S. Treasury and Related Securities.
In this section, Catherine and attorney Carolyn Betts explore the impact of the missing money and the adoption of Federal Accounting Standards Advisory Board Statement 56 (“FASAB 56”) on the credit of U.S. government securities. They describe why it is not prudent for investors to rely solely upon primary and secondary securities dealers, the U.S. rating agencies, and mandatory disclosure by issuers to accurately assess the risks and values of certain securities. While we encourage investors to do their own due diligence, we also recognize that FASAB 56 eliminates any hope that the investor will be able to obtain sufficient information to accurately assess the credit and value of his or her holdings of U.S. Treasury and other securities whose values are affected by Statement 56 (i.e., a meaningful percentage of U.S. public and private equity and debt securities).
