NEW YORK (CNNMoney.com) — New York State Attorney General Andrew Cuomo Thursday brought a multi-billion dollar civil lawsuit against the Swiss banking giant UBS for allegedly pushing everyday investors into buying troubled auction-rate securities.
The lawsuit charges UBS (UBS) with falsely marketing and selling auction-rate securities as safe, cash-equivalent investments at a time when the market for these securities was under severe strain.
“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 said.
The state’s investigation also revealed that top UBS executives sold off approximately $21 million of their personal holdings of auction-rate securities, after they learned of troubles in this segment of the market.
“You can’t have two sets of rules – one set of rules for customers and one for senior officials,” said Cuomo.
New York’s top law enforcement official noted, however, that no charges had been filed against any individuals.
He added that his office was looking at a number of other financial institutions, but declined to provide any further details citing the ongoing nature of the investigation.
UBS issued a statement Thursday, saying it would vigorously defend itself against the complaint.
The company said that it believed that no employee had engaged in illegal conduct…
