I HAVE A

simple message for Wall Street: Do the right thing. I say this both as a client and as a shareholder, and as someone who has recommended the stocks of big investment banks on many occasions. In owning and recommending these shares, I am primarily concerned with integrity trust is the foundation on which financial institutions rest. But recent events have shaken my confidence.

Like millions of other investors, I parked my cash in something that was sold to me as a money-market fund. It appears on my account statement under the heading "other cash." I've owned shares for years, withdrawing cash as needed. There are several varieties of these cash alternatives; in my case they were called auction rate preferred shares (ARPS), which are shares in a closed-end mutual fund that owns various kinds of triple-A-rated bonds. There was little or no risk to the principal, because rates were set at regular auctions. There's never been a default on an interest payment. For 20 years the auctions continued without incident. Then in February the auctions failed. Goldman Sachs and Citigroup stopped bidding, and every other major Wall Street firm followed their lead. Liquidity evaporated.

The main point of a money-market fund or cash alternative is ready access to cash. In my case and that of many investors, that access vanished. The assets were frozen, unredeemable. When I called a Merrill Lynch broker to ask whether the failed auctions had any effect on my account, I was told I was stuck. The only relief Merrill offered was a margin loan against my assets. In other words I would have to pay interest to get my own money which is infuriating, simply on principle.

For many the situation is much worse. Since first writing of my plight on SmartMoney.com, I've heard from dozens of worried investors. Some don't know how they'll pay their taxes. Others have canceled home purchases. Business owners say they can't meet their payrolls. ARPS and similar securities constitute an $80 billion market; many people owned them without even realizing it. And it could get worse: As credit woes spread, concerns are mounting that the more ubiquitous money-market funds could face a similar freeze.

Wall Street's silence has been deafening. ARPS investors tell me they've heard no explanation from their brokers. Their statements still carry the shares at face value, as though nothing happened.

So I called Goldman Sachs, the firm whose withdrawal from the market helped trigger the squeeze. I explained that I was a Goldman shareholder as well as a journalist, that I had recommended Goldman stock and had long admired the firm for its professionalism and integrity. I wanted to understand the firm's point of view. Had Goldman notified its clients? Was it helping clients in need? Was it working to solve this crisis? A spokesperson for Goldman called the next day: "I'm sorry we won't be able to help you." I was incredulous. The firm had no comment at all? I also called Morgan Stanley, in part because I had heard from a disproportionate number disgruntled Morgan Stanley clients. Its spokesperson was slightly more forthcoming, but he, too, said the company couldn't do much to offer relief to clients.

A few firms deserve credit for redeeming their clients' shares. Scotland's Aberdeen Asset Management redeemed $30 million in ARPS; Eaton Vance redeemed $1.6 billion. Nuveen Securities, one of the largest issuers, said it was working to redeem its $15.4 billion in ARPS and hoped to begin by the end of March. Stranded investors should keep the pressure on the firms and brokers who sold them these products.

There are at least a few smaller firms that saw the risks emerging and urged clients to avoid ARPS. One is SVB Financial Group, based in Santa Clara, Calif., which serves primarily corporate clients. In a prescient comment last August, the firm warned of liquidity risks in the auction market. Head portfolio manager Joe Morgan told me he took clients out of ARPS four years ago and has avoided them since. Another laurel goes to LCM Capital Management in Chicago, a money-management firm that has been warning its clients about risks in nearly all cash-alternative vehicles. Managing partners John Nowicki and Gary Wozny told me they moved their clients out of all non-Treasury money-market funds last year after subprime-mortgage issues first surfaced.

The ARPS crisis should have a solution, which should also help stave off panic in markets for other supposedly liquid securities. Despite tremors in the municipal-bond market, the underlying securities are sound. There haven't been any defaults; interest is still being paid. The problem is liquidity, and liquidity is a function of confidence. If I were Treasury Secretary Hank Paulson, I'd be reading the riot act to Goldman, Citigroup, Merrill and the others who abandoned the auctions they created. If these firms took billions in faltering CDOs and SIVs onto their balance sheets, why not this triple-A-rated paper? In addition, a government backstop may be necessary not a bailout, but a promise to step in if bonds default. Once liquidity is restored there should be no loss to any of the participants, including the investors now stuck with securities they can't sell.

What's important is that something be done fast. I believe the firms themselves would like to do right by their clients, but they need to emerge from their moated fortresses with explanations and solutions. This is an opportunity to demonstrate courage, leadership and confidence in the financial system and win back the loyalty of a generation of customers. Trust, once lost, is very difficult to restore.