Reserve Primary Fund: A Money Market Nightmare

The Reserve Primary Fund, which violated the sacred code of money market funds in September when it "broke the buck" (more on that here), is now distributing checks to shareholders. Each investor is getting back only 50 percent of their current account balance. The president of Reserve Management—the fund's adviser—said this is an initial step in the process of liquidating the fund and that they're "committed to making future distributions when more cash becomes available."

After it hands out $26 billion to shareholders, the Reserve Primary will have roughly $25 billion in assets. It had been worth $64.3 billion at the end of May, according to this story. In the next couple of days, the fund plans to post its plan for the total liquidation of assets.

Needless to say, customers are angry.