New York AG files complaint against UBS for securities misrepresentation News
New York AG files complaint against UBS for securities misrepresentation

[JURIST] New York Attorney General Andrew Cuomo [official profile] filed a lawsuit [complaint, PDF] against financial firm UBS [corporate website] on Thursday for allegedly misrepresenting so-called "auction rate securities" as low-risk despite the actual volatility of such investments. In the complaint, Cuomo alleges that UBS led investors to believe they could easily divest themselves of the long-term securities, and that after the company was aware of market instability, they continued to push the funds even though top executives had moved quickly to sell their own holdings. During a press conference on the lawsuit, Coumo said [press release]:

Not only is UBS guilty of committing a flagrant breach of trust between the bank and its customers, its top executives jumped ship as soon the securities market started to collapse, leaving thousands of customers holding the bag. Today we bring the first nationwide lawsuit against UBS, seeking to recover billions of dollars for customers and sending a resounding message to the rest of the industry that this type of deceptive behavior will not be tolerated.

Cuomo is seeking to force UBS to buy back the securities from investors and to pay restitution for any profits made from their sale, as well as other damages. AFP has more.

On Wednesday, the Texas Securities Board [official website] said [Reuters report] it is considering banning UBS from selling securities in the state because of auction rate securities misrepresentations. A March New York Times report [text] said the practice of representing the securities as low-risk and highly liquid was widespread and has resulted in large loses and a number of lawsuits around the country.

THIS DAY @ LAW

Thomas Becket, former Chancellor of England, murdered by Henry II's knights

On December 29, 1170, Archbishop Thomas Becket, former Chancellor of England, was murdered in Canterbury Cathedral by knights acting in the name of Henry II.

Becket and Henry had been entangled in a power struggle over, among other things, criminal jurisdiction over clergy. Read a contemporary account of the murder of Thomas Becket.

Texas attains US statehood

On December 29, 1845, Texas became the twenty-eighth state to join the United States of America when US President James K. Polk signed the Ordinance of Annexation. Texas had a complicated path to statehood because it had formerly been part of Mexico and then an independent republic. The US Congress passed the Annexation of the Republic of Texas Joint Resolution on March 1, 1845. Voters in Texas then approved the Ordinance of Annexation in October, before it was approved by the US Congress and signed into law by President Polk on this day in 1845. The US Supreme Court later ruled in Texas v. White that, despite its unique path to statehood, Texas did not have the right to secede from the union.