New York Attorney General Andrew Cuomo became the second state regulator to file securities fraud charges against UBS Securities LLC and UBS Financial Services yesterday, arguing that UBS executives sold $21 million of their personal auction-rate securities while the firm aggressively marketed to retail ARS they knew had liquidity risk.

As with a similar suit filed last month by Massachusetts Secretary of the Commonwealth William Galvin, Cuomo's suit shows that the underwriting and financial services subsidiaries of the Swiss-based bank realized as far back as last summer that the ARS market was fundamentally flawed and poised to collapse, and that ARS should not be treated as safe, liquid securities.

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