UBS to settle ARS issues for nearly $19.4 billion

We thought Citigroup might become the poster child for the auction rate securities scandals--yes we can now use that term--given the fact that New York regulators are convinced they destroyed a lot of evidence. But Citigroup's deal to buy back $7 billion in auction rate securities from individuals, along with a $100 million fine, looks like a pittance compared to what UBS will buy back: $19.4 billion worth of securities. That's a huge sum. Merrill Lynch, another big ARS player, has agreed to buy back $12 billion. That Massachusetts was able to extract so much from UBS says a lot about the strength of the case, and the extent of UBS's sales the retail level. This is certainly another black eye for UBS. Recall the tax evasion scandal that is still percolating along. We will likely see similar deals involving other institutions trickle out soon.  

For more:
- here's an AP article

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