Texas files action against UBS

The Texas State Securities Board in Austin submitted a filing yesterday that could partially suspend UBS AG from operating as a securities dealer in the Lone Star State until those who purchased auction rate securities from the firm are reimbursed. The action comes amid other state investigations into auction rate securities sold by Zurich, Switzerland-based UBS after the market froze in February. The securities are designed as long-term investments whose rates are reset periodically in weekly or monthly auctions. A Texas judge is scheduled to hold a Sept. 22 hearing regarding the ARS complaint and propose a decision to be ruled on by Texas Securities Commissioner Denise Voigt Crawford. UBS officials issued a statement in response to the filing, saying that it supported the ARS market “longer than any other firm” and had about $11 billion worth of the securities at the end of the first quarter. “We are disappointed that the Texas State Securities Board has filed this complaint against us as we, our peers and the industry work toward solutions,” UBS said in the statement. “We continue to operate our business as usual in Texas, and we continue our cooperation with the state.”