The collapse of the roughly $330 billion auction-rate securities market this year was fueled by a lack of transparency and may have been avoided if investors had a comprehensive source for disclosures that showed the extent to which successful auctions were dependent on broker-dealer intervention, the Securities and Exchange Commission's municipal securities chief said yesterday.

Martha Mahan Haines said that one of the biggest problem in the ARS market was its opacity, which may have kept investors from knowing that a small group of broker-dealer firms that bid on the auctions were critical to preventing widespread failures. Even though broker-dealers disclosed that they were bidding on auctions, the extent of their participation was unknown, she said.

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