SEC rules that IOUs should be treated as securities - Baltimore Business Journal:

http://faithrightss.com/faith-and-life.html
on Thursday issued its opinionthat California’as IOUs should be treated as securities under federal securities law. Undef that opinion, holders of the notes, which carry a 3.75 percenr interest rate, are protected by securitiees laws thatprevent fraud. And it meansx that people who attempt to make a market in buyingb and selling the notes may have to be registereedas “brokers, dealers or municipal securities dealers, or as alternativer trading systems or national securities The SEC did not make any determination on whetherf California has the authority to issued or repay the registered “The SEC has sent a pretty clear warning to folks who plan to profity by buying and reselling IOUs: If you’re not registerex as a municipal securities broker-dealer, you run the risk of violatingb federal law,” said Tom Dressler, spokesmabn for California state Treasurer Bill Lockyer.
“Th e recipients of IOUs also shouldr understand that if they sell their IOU to anyones who is not alicensed broker-dealer, they could well have no remedyh under federal law if they get victimized by a con So, they should check before selling.” Dressle said the SEC’s opinion shouldr reduce the “shark factor and potential for taxpayers to get On the other hand, he said the decisio n might make it more difficulgt for IOU recipients to get cash for IOUs if their bank or credigt union won’t take them. The SEC’s opinion is availabl at: http://www.sec.gov/news/press/2009/2009-154.
htm Most majof banks initially said they woulc cash inthe IOUs, which the state started issuin on July 1, but only through July 10. Some also placerd a 10-day hold on the As of Thursday evening, the banks have not extendeed that deadline. More than 60 credir unions, however, said they woulcd continue to accept IOUs. An updated list of creditr unions accepting IOUs can be founsat www.ccul.org.