Th e auction rate securities (ARS) market came into being aft er the decline in technology stock prices in 2001-2002. During the heyday of the scheme, investors were attracted to ARS because they represented high-grade short-term paper with a higher yield than Treasury bills. However, following the recent credit crisis, the ARS market failed leaving thousands of investors stranded, unable to, sell, collect on, or otherwise convert their securities. Th is proposed chapter provides a comprehensive analysis of the ARS market with a particular emphasis on the origins and mechanics that caused its recent collapse.