Texas Instruments Inc., the second-biggest U.S. maker of microships, filed a lawsuit saying Citigroup Inc., Morgan Stanley and Bank of New York Mellon Corp. sold it $524 million of auction-rate securities that it cannot liquidate.
The Dallas chip company said Citi, Morgan Stanley and Bank of New York Mellon steered it to securities that were promoted as safe as cash but turned out to be illiquid.
It also said the dealers did not disclose the extent to which they participated in the auctions to prop them up.
The three financial companies "marketed [auction-rate securities] to Texas Instruments as a highly liquid alternative to other short-term investments," Texas Instruments said in a suit filed last week in a state court in Dallas.
