UBS the world's largest wealth manager, said it placed an employee on administrative leave after the Wall Street Journal reported the Swiss bank suspended U.S. fixed-income chief David Shulman.
"We did place an employee on administrative leave last week but we decline to identify the employee,'' Tatiana Togni, a spokeswoman for UBS in Zurich, told Bloomberg News. Shulman remains head of fixed income, added Karina Byrne, a spokeswoman in New York.
E-mails between Shulman and UBS executives were disclosed in a lawsuit filed June 26 by Massachusetts Secretary of State William Galvin, who claimed the bank committed fraud by selling the bonds as the equivalent of money market securities without disclosing to investors that the $330 billion auction-rate securities market was lurching toward a breakdown.
Shulman, also global director of municipal securities, ran the auction-rate securities business for Switzerland's biggest bank, the New York-based newspaper said. UBS said it was "honest and ethical'' in its marketing of auction-rate securities, according to the bank's reply to a lawsuit filed last month.
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