UBS faces fraud charges in US

United States regulators have filed civil fraud charges against the financial services arm of Swiss bank UBS for allegedly misrepresenting investment opportunities.

This content was published on June 27, 2008 - 10:23

The complaint filed on Thursday by the Massachusetts Securities Division alleges that the bank knowingly let brokers present its so-called auction-rate securities as virtually risk-free so it could reduce its own stake in the failing scheme.

The investments have their interest rates set at periodic auctions, depending on the submitted bids. Auction rate securities were once considered safe, and were purchased by investors who wanted a place to park their money where it could be easily accessed.

When the programme ultimately failed, investors - many of them retirees or small business owners - were left with securities they could not sell, the complaint said.

The state wants to force UBS to return all investor funds and pay a fine. The amount of money sought was not disclosed in the complaint.

Last month, UBS reached an agreement with the Massachusetts attorney general's office to reimburse about $37 million (SFr37.65 million) to 17 local governments and the state's Turnpike Authority by buying back auction-rate securities the towns and cities had invested in.

This article was automatically imported from our old content management system. If you see any display errors, please let us know:

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at

Share this story

Change your password

Do you really want to delete your profile?