UBS AG will return more than $35 million invested in prohibited auction rate securities to more than a dozen Massachusetts municipalities, the state's top lawyer said on Wednesday.
Martha Coakley, the Massachusetts attorney general, said UBS Financial Services and UBS Securities LLC will return the money after the company had misled towns and cities into improperly putting funds into auction rate securities that many state officials thought were as safe as cash.
More than a dozen Massachusetts towns and cities found a portion of their assets frozen in the auction rate securities after the roughly $330 billion market seized up this year for the long-term bonds whose rates are reset periodically.
Investors flooded dealers with paper backed by bond insurers, whom they feared would lose their "triple-A" credit ratings. As a result, many municipal bond issuers were forced for several weeks to pay unusually high interest rates.
No comments:
Post a Comment