Report: Cuomo set to charge UBS with fraud

This could be the first of several cases arising from an investigation into the auction rate securities market.
JUL 23, 2008
By  Bloomberg
New York state Attorney General Andrew Cuomo is preparing to file civil securities fraud charges against UBS AG in what could be the first of several cases arising from an investigation into the auction rate securities market, The Wall Street Journal reported. The suit could also include allegations of malfeasance by senior UBS executives, people familiar with the case told the Journal. Because UBS’ trading operations for auction rate securities are based in New York, the lawsuit could seek a broad resolution for UBS auction rate clients, who hold roughly $25 billion of these instruments. The suit could involve a settlement that would let customers cash in at face value securities that have been illiquid for months. “A filing of a complaint at this point would be disappointing given we are working with regulators, peers and industry groups to develop solutions addressing the liquidity issues in the ARS market,” according to a statement from Zurich, Switzerland-based UBS.

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