CT entities share $541K of UBS fraud settlement
Ten Connecticut agencies and municipalities are collecting some $541,000 in a multistate bond derivatives-fraud settlement with Swiss bank UBS AG, whose U.S. headquarters is Stamford, authorities say.
State Attorney General George Jepsen said Tuesday the smallest sum is $7,442 to South Center Regional Water Authority to as high as $165,104 to the city of Stamford.
The restitution is part of a $90.8 million settlement between UBS and 24 states and Washington D.C.
Connecticut and New York lead the ongoing probe.
Also receiving Connecticut restitution payments are: the Connecticut Housing Finance Authority, $127,007; the Hospital of St. Raphael, $92,559; the state of Connecticut, $53,578; city of Bridgeport, $26,677; the Connecticut Student Loan Foundation, $23,699; the University of the Sacred Heart in Fairfield, $18,485; the Connecticut Municipal Electric Energy Cooperative, $17,630; and city of Norwalk, $8,926.
Municipal bond derivatives are contracts that tax-exempt issuers use to reinvest proceeds of bond sales until the funds are needed, or to hedge interest-rate risk.
In April 2008, the states began investigating allegations that certain large financial institutions, including national banks and insurance companies, and certain brokers and swap advisors, engaged in various schemes to rig bids and commit other deceptive, unfair and fraudulent conduct in the municipal bond derivatives market, officials said.
The wrongful conduct took the form of bid-rigging, submission of non-competitive courtesy bids and submission of fraudulent certifications of compliance to government agencies, among others, in violation of U.S. Treasury regulations.
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