New York State Attorney General Andrew Cuomo yesterday filed civil fraud charges against UBS, accusing the firm of a “multibillion-dollar consumer and securities fraud,” according to The Wall Street Journal. The filing demands that the firm pay back its profits from the business and pay damages.
Wall Street firms are under scrutiny for alleged wrongdoing as the $330 billion auction-rate securities market collapsed in February. A UBS spokesperson told the WSJ: “We will vigorously defend ourselves against this complaint.”
Cuomo’s case is similar to charges filed by Massachusetts officials and numerous private cases and arbitration claims filed in recent months against UBS and other major investment firms.
The firms are accused of misleading customers despite the faltering securities market. The actions led to corporate customers not being able to sell securities when the collapse occurred.
Auction-rate securities, issued by municipalities, student-loan companies, and charitable organizations, are long-term securities.