Thursday, November 18, 2010

Massachusetts Fines UBS $100,000 In Hedge-Fund Hotel Case

NEW YORK (Dow Jones)--Massachusetts fined UBS Securities LLC $100,000 to settle a complaint the firm didn't enforce the full disclosure of its arrangements with hedge fund advisers.
UBS Securities, a unit of UBS AG (UBS, UBSN.VX), settled the allegations without admitting or denying wrongdoing, a spokesman for Massachusetts Secretary of the Commonwealth William F. Galvin said Thursday. UBS spokeswoman Allison Chin-Leong said, "we're pleased to have resolved the matter."
The case dates back to a 2002 inquiry into ABN Amro Securities LLC, a prime broker that offered hedge funds office space, technology and other services in an arrangement known as a "hedge-fund hotel." UBS acquired ABN Amro's prime brokerage business in 2003 for $250 million. Massachusetts' Galvin said UBS didn't enforce a requirement that its hedge-fund hotel clients disclose their arrangements with the bank to investors.

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