The SEC has reached an agreement with the Swiss bank to return $22bn to customers
UBS, the Swiss bank, reached an agreement with the Securities and Exchange Commission (SEC) to return around $22bn to its customers who invested in auction rate securities (ARS).
The plan includes approximately $8.2bn for individual investors, small businesses, and charitable organizations, $3.3bn for holders of tax-exempt Auction Preferred Shares, and $10.3bn for institutional investors, said the SEC.
The SEC said in its statement: ‘The conduct underlying the proposed charges stems from UBS’s marketing of auction rate securities as cash alternatives. The liquidity of these securities was premised on UBS providing support bids for auctions it managed when there was not enough customer demand, but this was not adequately disclosed to customers. When UBS stopped supporting auctions in February 2008, it led to widespread auction failures for UBS customers.’