New Hampshire hits UBS with ARS charge

The firm is accused of misleading an issuer of student loans in that state by urging it to buy auction rate securities.
AUG 14, 2008
By  Bloomberg
The New Hampshire Bureau of Securities Regulation is accusing a unit of Zurich, Switzerland-based UBS AG of fraud for misleading an issuer of student loans in that state by urging it to buy auction rate securities. In a civil complaint filed today against New York-based UBS Securities LLC, the bureau accused the firm of knowing that the auction rate securities market was on the “verge of collapse” when it actively encouraged the Concord-based New Hampshire Higher Education Loan Corp. to purchase more of the securities. UBS Securities is the longtime financial adviser and underwriter to New Hampshire Higher Education Loan Corp. The bureau also alleged that UBS engaged in “dishonest and unethical” business practices and “violated its fiduciary duty as an underwriter, investment banker and broker-dealer” to New Hampshire Higher Education Loan Corp. “By this action today, New Hampshire is one of the first states to focus on the consequences of failed auction markets to other parties besides investors, specifically regarding students,” Mark Connolly, New Hampshire director of securities regulation, said in a statement. Responding to the complaint, Kris Kagel, a spokesman from UBS, said it is “frustrating that the New Hampshire Bureau of Securities Regulation has filed this claim against us, given that we have been in discussions with them and [New Hampshire Higher Education Loan Corp.] regarding the unique issues being raised by the state and have recently reached a comprehensive settlement with federal and state regulators to provide liquidity to all investors.” “We will vigorously defend ourselves against this complaint as we believe that we worked in the best interests of our investor and issuer clients,” he said. Last week, UBS agreed to buy back $18.6 billion in auction rate securities.

Latest News

Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says
Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says

A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.

SEC bars New Jersey advisor after $9.9M fraud against Gold Star families
SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.

Navigating the great wealth transfer: Are advisors ready for both waves?
Navigating the great wealth transfer: Are advisors ready for both waves?

After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.

UBS Financial loses another investor lawsuit involving Tesla stock
UBS Financial loses another investor lawsuit involving Tesla stock

The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.

Trump's one big beautiful bill reshapes charitable giving for donors and advisors
Trump's one big beautiful bill reshapes charitable giving for donors and advisors

An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.