Some of those shareholders kept a close watch on the Fund’s holdings and noticed a large position in broker Lehman Brothers. These investors—sensing that the brokerage firm might be in trouble— decided to take their money out of the fund. To meet their redemption requests, the fund sold other securities—with the unfortunate result that the problematic Lehman securities became an ever-larger portion of the remaining assets. As a consequence, when Lehman declared bankruptcy on Septem- ber 15, 2008, the fund was hard hit, and the following day, the Primary Fund’s board dropped the NAV to $ per share. At the time, the fund needed permission from the SEC to suspend.
