UBS Settles CDO-Related Claim

Swiss bank to pay $50 million to settle SEC claim that it misled investors in collateralized debt obligations about its use of their funds.

UBS AG, Switzerland’s largest bank, will pay almost $50 million to settle U.S. regulatory claims that a brokerage unit improperly retained millions of dollars of upfront cash it received while acquiring collateral for a financial product.

The Zurich-based bank’s UBS Securities unit failed to tell investors in 2007 that it was keeping $23.6 million in payments rather than transferring it to the collateralized debt obligation (CDO), the Securities and Exchange Commission (SEC) said in an administrative order filed today.

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