UBS Buying Back $20 Billion in Securities

On August 8, UBS agreed to buy back nearly $20 billion in auction-rate securities from investors; a day after Citigroup reached a similar settlement with regulators for $7 billion. Citigroup’s payment comes as a result of wide-ranging investigations into the collapse of the market for bond-like investments, according to The New York Times.

UBS will repurchase all $18.6 billion of the securities it sold and pay a fine of $150 million as part of an investigation led by New York Attorney General Andrew Cuomo. Cuomo told the NYTimes that his investigation into troubled securities was ongoing. “We tend to start with the largest because that can make the greatest impact,” he said.

As part of Citigroup’s settlement announced on Thursday, Citigroup will also pay fines of $100 million.

The $330 billion auction-rate securities market involved investors buying and selling market instruments but at interests that were reset at regular auctions. Regulators are still investigating the collapse in the market to determine who was responsible for its demise and how to repay investors. “What we’ve established is, the institutions are responsible,” Cuomo said to the NYTimes. “People will get their money, and get it back in the immediate future.”