The Texas State Securities Board Tuesday scheduled a Sept. 22 hearing to decide whether to suspend the license of UBS AG’s broker-dealer and financial services divisions in response to complaints that the Swiss-based firm misrepresented and omitted key information concerning the liquidity of auction-rate securities, fraudulently failed to disclose other risks tied to ARS, and did not sufficiently train its financial advisers on the specifics of the auction-rate market.
In an 11-page notice, the board said it will consider assessing an administrative fine as well as ordering that the firm cease and desist from engaging in fraudulent conduct, in addition to the possible suspension.
UBS said in a statement that it is disappointed that the board scheduled its hearing as it continues to work with regulators and clients towards resolving illiquidity in the ARS market, which collapsed in mid-February. The statement said that UBS will continue to operate in Texas usual.
The hearing comes after the top securities regulator in Massachusetts filed securities fraud charges against UBS last month and as New York Attorney General Andrew Cuomo is said to be preparing a similar suit against the firm.