What were these buyers of the Auction Rate Securities promised in terms of liquidity / how were they betrayed?

DirtyD answered 4 months ago …

I don't think they were ever "promised" anything in terms of liquidity. But I think it was certainly implied that these investments, like many others, would always have a market to sell into. Where I think they were be betrayed was that liquidity risk was never fully disclosed. These were securities that banks pretty much made/created/and maintained a market in. If they stopped buying then the investors who owned them would never have a buyer to sell the securities to, thus rendering them worthless. That's where they were betrayed.