NY AG Files Lawsuit Against UBS
New York State Attorney General Andrew Cuomo filed a lawsuit alleging that senior executives at the U.S.-based unit of Swiss bank UBS misled investors about the potential risks of $25 billion in securities.The suit was filed on July 24 in New York's Supreme Court, and charges Weehawken, New Jersey-based UBS Financial Services with failing to disclose the risks of the auction rate securities to investors when it knew the market for the investments was crashing in late 2007.
“Most disturbingly,” the suit states, “as the storm clouds loomed over the auction rate securities market and UBS pushed the illiquid paper on the investing public, several senior UBS officials sold over $21 million of their personal auction rate securities holdings.”
The executives, who are not named as defendants, were not identified.
Not only is UBS guilty of committing a flagrant breach of trust between the bank and its customers, its top executives jumped ship as soon the securities market started to collapse, leaving thousands of customers holding the bag,” Mr. Cuomo said in a statement. UBS has denied wrongdoing.
The lawsuit seeks to require UBS to buy back the securities from customers. It also seeks disgorgement of ill-gotten gains, restitution and other damages, and injunctions from further violations of New York’s Martin Act.
Published on July 28, 2008
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