Galvin slams UBS for hedge perks

UBS Securities LLC, the investment banking unit of Swiss banking giant UBS AG, was today accused by Massachusetts regulators of "dishonest and unethical" practices in dealings with hedge fund advisers. The firm allegedly gave hedge fund advisers below-market rent, low-interest personal loans, tickets to sporting events, meals and other gifts to induce and maintain business, William Galvin, the secretary of the commonwealth and the state's top securities regulator, said in a statement. Michael Torrisi, an executive director at the firm's prime brokerage division, allegedly charged $12,000 on his corporate credit card for "Red Sox Suite Tickets" on March 12, 2006, which were later distributed to clients. "Unbeknownst to the pension funds, university endowments, charitable foundations, institutional investors and individuals who invest in hedge funds, the rewards for the hedge fund advisers come with implicit and sometimes explicit quid pro quos," said Mr. Galvin in a statement. Mr. Galvin's complaint also charges UBS with failing to supervise its agents and to enforce compliance with its own ethical code, which states "[w]e do not provide...improper inducements in the course of our business dealings with others." The complaint, filed with the Massachusetts Securities Division, seeks a censure, cease and desist order and an undisclosed administrative fine, the statement said. A UBS spokesman declined to comment.