A class action law firm is investigating losses in auction-rate securities and investment banks that sell the paper as the market has begun to crack and the frequency of failed auctions has increased.

Dimond Kaplan & Rothstein, a securities law firm, said in a statement it is investigating claims involving losses in auction-rate securities and broker dealers that sold them - Lehman Brothers, Goldman Sachs, Merrill Lynch, Citigroup, UBS and Morgan Keegan.