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UBS is an unethical business

July 28, 2008

Once again, and continually, UBS Financial Services prove that they are corrupt!!

2 Articles quoted from MSN Financial website

UBS sued by Cuomo for securities fraud

July 25, 2008 12:58 PM ET

New York state Attorney General Andrew Cuomo has launched a multi-billion dollar securities fraud lawsuit against UBS charging the Swiss bank with falsely selling auction-rate securities as safe, highly liquid, and cash-equivalent securities.

The actions were deceptive, the AG said, as the market came under tremendous strain, leaving the securities with mounting liquidity risks that eventually blocked thousands of customers from accessing their holdings. The result, the suit says, has left UBS customers holding more than $25 billion in illiquid, long-term paper.

Cuomo said the probe also found that as the securities market started to collapse, at least seven of the bank’s top executives quickly sold $21 million in personal holdings of auction rate securities, but continued to market the securities to its consumers. He cited internal UBS e-mails, which have been subpoenaed by the attorney general’s office, to show company executives’ efforts to divest personal holdings of the securities.

“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,” said Cuomo, who wants the company to buy back the auction-rate securities from customers at par.

UBS said it plans a vigorous defense of the charges, which were filed in state Supreme Court in New York.


New York accuses UBS of securities fraud

The attorney general of New York accused UBS of consumer and securities fraud on Thursday, saying the bank misled investors when it sold them auction-rate securities.

Auction-rate securities are preferred shares or debt instruments with rates that reset regularly, usually every week, in auctions overseen by the brokerage firms that originally sold them. But the $300 billion market for these instruments collapsed in February, trapping investors who had been told that they were safe and easy to cash in.

Even as a senior executive at UBS called the market “a complete loser,” the bank continued to pitch the securities as short-term, liquid investments, according to the civil complaint filed by Andrew M. Cuomo, attorney general of New York.

At the same time, seven executives at the bank sold their personal holdings of the securities, which totaled $21 million, to avoid losses, according to the complaint.

“Once they knew the auctions were failing, they removed their personal money and corporate money from the auctions and were still bringing consumers into the auctions,” Cuomo said. “Now people have their funds locked up in a way they can’t access them.”

UBS halted the auctions of these securities on Feb. 13, leaving more than 50,000 UBS customers holding about $37 billion in the investments, according to the complaint. These investors — city governments, companies, individual investors — remain unable to sell them in many cases.

UBS has offered to lend its customers up to 100 percent of the value of the securities until liquidity returns. Cuomo has asked the bank to return the full value of the securities to investors in cash.

The bank rebutted Cuomo’s accusations. “We will vigorously defend ourselves against this complaint,” UBS said. “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.”

Cuomo’s office is the third state authority take UBS to task over the auction-rate market, after William Galvin, the secretary of the Commonwealth of Massachusetts, and the Texas State Securities Board.

Cuomo’s case could have greater impact because UBS’s bond desk is based in New York, giving Cuomo the right to bring a case on behalf of UBS customers everywhere.

The case centers on e-mail messages among UBS executives and the attorney general expects to bring several more cases in coming weeks related to the auction-rate market.

At UBS, senior executives were aware of the growing problem in the auction-rate market by December last year and, despite concerns from the bank’s risk officer, they covered up problems while continuing to sell the securities to investors, the New York complaint says.

In January, when UBS executives halted some of the auctions, the bank’s head of public finance banking wrote in an e-mail message that UBS officials should not tell bankers about those auctions because “it will be another indication (perhaps preliminarily) that we are killing this thing.”

The bank’s global head of municipal securities wrote some of the more colorful e-mail messages, saying in January that it would be “scary and delicate” to tell the bank’s financial advisers who sold the securities about the growing problem. In February, that executive described the situation in the market as “absolute torture.”

Lawyers specializing in white-collar crime said they expected to see many more cases filed in the coming months. Bank of America, Merrill Lynch and Wachovia have been named by other state regulators as targets in auction-rate investigations.

“When there is a financial crisis and the public is looking for scalps, the law enforcement officers will respond in kind,” said Bradley Simon, a lawyer with Simon & Partners in New York.

You know there’s plenty more articles over just how corrupt, ethically and morally UBS Financial Services is, so I suppose that the company has no problems having, under their employ, in high positions a gentleman in one of their Houston TX regional offices who is also very morally and ethically corrupt, both in his business life as well as personal life.

Like the devil, perhaps UBS Financial Services brings in similar creatures who reflect, almost in a mirror image, their own outlooks. If the head of the snake is unethical and immoral, surely the rest of the snake is too; UBS Financial Services has proven they are a snake.

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