A top lawyer at UBS's global investment bank operations in New York has agreed to pay $6.5 million (SFr7.39 million) to settle an insider trading case.
David Aufhauser was accused of selling his personal holdings of auction-rate securities after getting insider information about the collapsing market for debt. The lawyer did not admit to any wrongdoing in agreeing to the settlement.
New York Attorney General Andrew Cuomo, whose office has been probing Wall Street's handling of the $330 billion auction-rate market, announced the settlement on Tuesday.
Regulators say financial firms misled investors into believing that auction-rate debt was as safe as and the equivalent of cash.
Under the settlement, Aufhauser, former general counsel for the UBS investment-banking unit, is also subject to a two-year ban from the securities industry and from practising law in the state for two years.
Aufhauser will pay $6 million to New York state that he had been due to receive in bonus pay from UBS, plus a $500,000 civil penalty, Cuomo said.
Cuomo's office contends that Aufhauser learned of non-public information about the bank's problems through an email he received while on a Friday-evening train from New York to Washington. Minutes later, while still on the train, he allegedly contacted his financial advisor with instructions to unload all his auction-rate securities.