From MarketWatch: New York Attorney General Cuomo to sue Citi units: reports (hat tip crispy&cole)
Apparently the NY State AG plans to sue Citigroup alleging material misrepresentations regarding Auction Rate Securities (ARS) "including assuring customers that these securities were as liquid as cash".
I know people that claim they were told the same thing about ARS - "liquid as cash" - by other institutions. I've also been told that at least one institution is offering interest free loans to people with their money locked up in ARS.