Saturday, August 2, 2008

UBS General Counsel Implicated in Auction Rate Securities Party

It seems that UBS just can't keep themselves out of the news. First the tax fraud investigation, then the Auction Rate Securities lawsuits, then the Massacheuttes Attorney General's suit, and the New York AG's suit.

Now this revelation from the Wall Street Journal -

Today, the WSJ’s Liz Rappaport reports that David Aufhauser, the former general counsel to the Treasury Department and the current GC for UBS’s investment-banking arm is at the center of the complaint that New York AG Andrew Cuomo recently filed against the Swiss bank for fraud in the ARS market.

Aufhauser (Wesleyan, Penn Law, Harvard MBA) is the individual described in Cuomo’s case against UBS as “Executive A,” the WSJ reports. The complaint, filed last week, alleges that he and six other UBS executives sold $21 million of their personal holdings in auction-rate securities in the months leading up to the market’s collapse, based on unique inside knowledge of the problems in the market. Aufhauser’s lawyer didn’t respond to requests for comment.


According to the article, UBS is denying any wrongful conduct:

A spokeswoman for UBS said: “As we have said previously, after an internal review assisted by independent external counsel, UBS does not believe there was any unlawful conduct by any employee in this matter.”


However, having your chief legal counsel identified as a participant in a fraud cannot be good for any brokerage firm; and in particular for one with as many black eyes as UBS.


Law Blog - WSJ.com : UBS General Counsel, Merrill, Implicated in Auction Rate Securities Party: "UBS General Counsel, Merrill, Implicated in Auction Rate Securities Party"
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