UBS, Switzerland's largest bank, has agreed to pay $4.4 million (SFr4.6 million) to resolve allegations by Massachusetts that it misrepresented investment opportunities.This content was published on July 31, 2008 - 14:58
Massachusetts attorney-general Martha Coakley alleged that a local broker working for UBS misled cities and government agencies into thinking that auction-rate securities were as liquid as cash, a legal requirement for government investments in Massachusetts.
But early this year the market for the financial instruments dried up, and the cities were stuck holding long-term debt.
Of the $4.4 million, $1 million will go to the state for fees and to educate government officials about appropriate investments for their money.
The remaining $3.4 million will let Massachusetts cities and agencies redeem the full value of their securities from UBS, Coakley said.
The payments bring to $41.3 million the total amount UBS has paid to Massachusetts, after a $37 million partial settlement in May.
The bank didn't admit or deny wrongdoing in the settlement, which it said "represents the final step in the resolution of this matter with the Massachusetts attorney-general".
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