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

RIA moves: True North adds $353M California RIA as SageView grows North Carolina presence
RIA moves: True North adds $353M California RIA as SageView grows North Carolina presence

Plus, a $400 million Commonwealth team departs to launch an independent family-run RIA in the East Bay area.

Top Commonwealth advisor to recruiters: Stop with the cold calls already!
Top Commonwealth advisor to recruiters: Stop with the cold calls already!

“I respectfully request that all recruiters for other BDs discontinue their efforts to contact me," writes Thomas Bartholomew.

Blue Owl Capital, Voya strike private market partnership for retirement plans
Blue Owl Capital, Voya strike private market partnership for retirement plans

The collaboration will focus initially on strategies within collective investment trusts in DC plans, with plans to expand to other retirement-focused private investment solutions.

Why AI notetakers alone can't fix 'broken' advisor meetings
Why AI notetakers alone can't fix 'broken' advisor meetings

Wealth tech veteran Aaron Klein speaks out against the "misery" of client meetings, why advisors' communication skills don't always help, and AI's potential to make bad meetings "100 times better."

Morgan Stanley, Goldman, Wells Fargo to settle Archegos trades lawsuit
Morgan Stanley, Goldman, Wells Fargo to settle Archegos trades lawsuit

The proposed $120 million settlement would close the book on a legal challenge alleging the Wall Street banks failed to disclose crucial conflicts of interest to investors.

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.