UBS Plans to Buy Back Auction-Rate Securities

UBS AG plans to buy back as much as $3.5 billion of auction-rate preferred shares in the face of a lawsuit by Massachusetts authorities claiming the firm fraudulently sold the securities as low-risk.

According to Bloomberg News, the Zurich-based bank said investors will be able to get their money back in full. The offer applies to shares issued by tax-exempt closed-end funds managed by firms such as BlackRock Inc. and Nuveen Investments Inc., but does not include auction-rate debt from municipalities or student-loan providers.

UBS will finance the repurchases by reissuing the preferred shares in a private placement through a trust that will be consolidated on the bank’s balance sheet, the news report said. The reissued shares will carry a put option, guaranteeing the holder the right to sell, and will be marketed to money-market funds and other institutional investors.

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In the lawsuit filed last month, top Massachusetts securities regulator William Galvin accused UBS Securities LLC and UBS Financial Services of aggressively selling the investments to customers at a time when a top executive from the bank was dumping them from his personal holdings and large money managers were losing faith in them (See UBS Securities Faces Charges of Fraud by Mass. Authority). Regulators in New Hampshire and the Securities and Exchange Commission (SEC) are also investigating the matter, according to a Reuters news report.

In May, UBS Financial Services Inc. reached an agreement with Massachusetts Attorney General Martha Coakley to return $37 million to 17 cities and towns, as well as to the Massachusetts Turnpike Authority, for allegedly misleading them about the investments (See UBS Agrees to Repay Investors of Risky Securities).

ftwilliam.com Releases NQDC Plan Document

ftwilliam.com, a plan document and government forms software provider, released its 409A non-qualified deferred compensation plan document.

A news release said the document has been drafted in compliance with the final 409A regulations and can be used by plan sponsors to meet the January 1, 2009, compliance deadline for most plans.

According to the company, the offering includes an Adoption Agreement, Basic Plan Document, Plan Description, election forms, sample Rabbi Trust, in-service distribution form, and more. Features of the ftwilliam.com document preparation software include context sensitive help buttons and online error checking.

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The 409A plan document is available for $275/plan, or the company offers a Non-Qualified Plan Document Subscription for $775/year, which includes 457(b) and 409A.


More information is available at www.ftwilliam.com.

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