UBS Misled Customers
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Two subsidiaries of the Swiss bank UBS, earlier today, were accused of misleading investors about how safe auction rate securities were. The complaint was filed by William Galvin, Massachusetts' top securities regulator, and he accuses UBS Securities and UBS Financials Service of aggressively selling the instruments to customers at a time when large money managers were losing faith in them and a top UBS executive was dumping them from his personal holdings.
There are many similarities in UBS's business practices as there were at Countrywide, as both companies pushed the sales of "products" without telling their customers of their vulnerabilities or the amount or risk attributed to each product (i.e. Countrywide in proliferating subprime mortgages; UBS in pushing "cash alternatives" when employees were dumping them).
According to the New York Times, Mr. Galvin, "is seeking to get the UBS units to return investors' money and reimburse who had to sell at a loss."
Also, former senator Phil Gramm, who was a key player in the surge of subprime mortgages and CDOs, and who also worked as lobbyist for UBS, has yet to speak on either Countrywide's pending legal matters, it acquisition by Bank of America, or the trouble UBS faces (financial and legal) in the coming months. Mainly, Mr. Gramm has remained quiet in reagrds to the foreclosure/credit crisis, as he continues to advise Senator McCain on his presidential campaign's economic policies/initiatives.