UBS ordered to pay millions in damages
Swiss bank UBS has been ordered to pay almost $81 million (SFr85.4 million) in damages to a United States marketer of mobile phones.
An arbitration panel of the Financial Industry Regulatory Authority (Finra) made its award in favour of the Kajeet company of Maryland, which lost business when its cash was frozen in auction rate securities in early 2008.
A UBS spokeswoman said the bank “strongly disagrees with the arbitration panel’s decision... and we will file a motion to overturn that decision”.
Auction rate securities were long promoted as cash-like investments but became impossible to trade after credit markets seized up in 2007.
State and federal regulators forced UBS to repurchase $22.7 billion of auction rates from individual investors. In March, UBS agreed with a coalition of state securities regulators to purchase up to $200 million in such securities from investors not covered by the initial agreement.
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