Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

World Cup 2014: Germany-Brazil inspires the Web

Read more

THE INTERVIEW

Boutros-Ghali: 'I wanted to reform the UN'

Read more

IN THE PAPERS

57 000 little problems

Read more

IN THE PAPERS

The Sarkozy 'threat'

Read more

BUSINESS DAILY

Budget challenge for India's new government

Read more

DEBATE

Africa's Newest Failed State: How to Stop Civil War and Famine in South Sudan? (part 2)

Read more

DEBATE

Africa's Newest Failed State: How to Stop Civil War and Famine in South Sudan?

Read more

MEDIAWATCH

Israeli strikes on Gaza as seen on social media

Read more

INSIDE THE AMERICAS

World Cup humiliation for host nation

Read more

  • Video: Muslims in China confront obstacles to Ramadan fasting

    Read more

  • French companies will have to accept anonymous CVs

    Read more

  • Israel steps up airstrikes as diplomacy gets under way

    Read more

  • Argentina beat Netherlands on penalties to reach World Cup final

    Read more

  • Foiled French jihadist ‘targeted Louvre and Eiffel Tower’

    Read more

  • Obama in Texas to urge congressional action on child migrant crisis

    Read more

  • Iraq’s heritage 'in danger' from ISIS militants

    Read more

  • Froome crashes out of Tour de France

    Read more

  • South Sudan independence heroes ‘have lost their way’

    Read more

  • 100 years on, the Tour de France returns to the Western Front

    Read more

  • Dozens of blindfolded bodies found south of Baghdad

    Read more

  • Both candidates say they won Indonesian presidential election

    Read more

  • Brazil players should never wear 'sacred uniform' again, press says

    Read more

  • Exiled Syrian opposition elects new president

    Read more

  • Ukraine imposes new conditions on peace talks with pro-Russia rebels

    Read more

UBS to buy back stressed securities

©

Latest update : 2008-08-09

According to a deal with US authorities, Swiss bank UBS will buy back 19 billion dollars worth of securities that it first sold to investors. The agreement is the result of the financial crisis, as the market for auction rate securities implodes.

Swiss banking giant UBS has agreed to buy back 19.4 billion dollars' worth of stressed securities it marketed to investors under a deal with regulators in the US state of Massachusetts, an official said Friday.

The settlement was announced after Massachusetts regulators had charged UBS in late June with securities fraud in relation to its role in marketing so-called auction rate securities.

"There has been an agreement. UBS will pay 19.4 billion dollars to buy back these securities," said a spokesperson for William Galvin, the Massachusetts secretary of the commonwealth.

The official said that the Swiss bank had also agreed to pay civil fines totaling 150 million dollars as part of the broad agreement.

The state deal with UBS comes a day after US banking behemoth Citigroup agreed to buy back 7.5 billion dollars' worth of auction rate securities it marketed to tens of thousands of investors in a settlement with federal and state regulators.

Hours after the Citigroup announcement Thursday, Wall Street investment bank Merrill Lynch said it would buy back 12 billion dollars' worth of the tainted securities.

Auction rate securities, essentially debt instruments issued by financial firms, municipalities and student loan companies, typically have a fairly lengthy maturity. But the interest rates on such securities can be volatile and change at weekly and monthly auctions run by banks.

The instruments provided a lucrative business for many banks in recent years, but the market for auction rate securities imploded in February as a sweeping credit squeeze -- which began in the US housing and mortgage markets -- worsened.

The market's collapse left many investors scrambling to redeem their holdings and nursing paper losses.

Regulators have been investigating how banks and brokerages marketed the securities to investors.

UBS had also been sued by New York authorities in relation to its marketing of the securities.

The Swiss bank has been hit hard heavy losses tied to US mortgage securities which have slumped amid a lengthy housing downturn, and has written down over 37 billion dollars in assets since a credit crunch began sweeping US and global markets last August.

Date created : 2008-08-09

Comments

COMMENT(S)