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New York - AG: Banking Giant UBS Commited Securities Fraud |
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The lawsuit claims several bank executives pulled their personal investments from the floundering market last winter, even as the company continued to tell customers all was well.
"They knew what was happening to the market," said Cuomo deputy Eric Corngold. "Buyers of these securities didn't have a clue."
Some 50,000 bank customers have been stuck holding $37 billion worth of the securities, unable to sell them since the market collapsed in February.
UBS said in a statement that while some of its employees exercised "poor judgment," none had engaged in illegal conduct.
"It is frustrating that the New York attorney general has filed this complaint while we have been fully engaged in good faith negotiations with his office to bring liquidity to our clients holding auction-rate securities," the statement said.
The lawsuit, filed in state court in Manhattan, is expected to be just one in a string of actions against banks for their conduct in the $330 billion auction-rate securities market.
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Read Comments (2) — Post Yours »
1
Jul 25, 2008 at 10:34 AM Anonymous Says:
Who is going to benefit from this lawsuit should the AG win his case? is it the client or the State?
2
Jul 25, 2008 at 12:05 PM deepthinker Says:
A murky lawsuit designed to get some headlines for afaded Democrat Star.