Forget A Seven Day Halt; Reserve Seeks to Halt Fund Redemptions Period; Has $60 Billion In Withdrawal Requests!!

The Reserve said it has filed, on behalf of the Primary Fund and the U.S. Government Fund, an application with the U.S. Securities and Exchange Commission (SEC) seeking an order to be allowed to suspend investor withdrawals or delay redemptions.

"The funds' investment adviser is unable to dispose of securities to fund redemptions without impairing the net asset value of each fund," the company said in a statement.

The Primary Fund has received redemption requests of about $60 billion this week, the company said. And investors have wanted to pull out about $6 billion from the $10 billion U.S. Government Fund, it added.

-Robert Wenzel

Holy Sh*t: Money Market Breaks Buck; Freezes Redemptions

One the largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1.

Reserve Primary Fund, a $64 billion fund managed by money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.

As of 4 p.m., the value of the fund's share was 97 cents. The Reserve said that redemption requests received before 3 p.m. will be paid out at $1 a share.

"Effective today and until further notice, the proceeds of redemptions from The Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption," The Reserve said in a statement.

On Monday, Wachovia said it would pump money into three Evergreen money market funds. Evergreen would not disclose how much is being put into the funds.

BlackRock Inc. sent a letter to its money market shareholders on Monday telling them that its funds had no Lehman debt.

"We do not have any holdings of Lehman Brothers paper, nor is Lehman a counterparty to any repurchase agreements in our 2a-7 registered money market funds," noted Simon Mendelson, managing director in BlackRock's COO global cash management group.