Texas?? top securities regulator has threatened to ban UBS from doing business in the state until investors who bought auction rate securities from the Swiss bank get their money back.
The Texas State Securities Board, in an administrative filing this week, claimed that UBS engaged in fraudulent conduct by mispresenting auction-rate securities as ??liquid investments? and a ??cash alternative?.
It also claimed the bank failed to disclose the risks that the securities could become illiquid.
In addition to an administrative fine, the board is seeking to suspend UBS from selling securities to investors in Texas ??until such time? that all funds held in auction-rate securities by investors are liquidated at par value. A hearing on whether to suspend the bank??s licence has been scheduled for September.
