According to a press release dated March 21, 2008, a class action lawsuit was filed on behalf of persons who purchased Auction Rate Securities from UBS, UBS Securities and UBS Financial Services during the Class Period and who continued to hold such securities as of February 13, 2008.
Specifically, the Complaint alleges that UBS violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction rate securities generally have long-term maturities or no maturity dates.
The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, UBS offered and sold auction rate securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by UBS and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008 of all major broker-dealers including UBS to "withdraw their support" for the periodic auctions at which the interest rates paid on auction rates securities are set.
The Complaint alleges that UBS failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because UBS and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) UBS and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) UBS continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a "freeze" of the market for auction rate securities would result.
On May 08, 2009, First Amended Consolidated Class Action Complaint For Violations Of The Federal Securities Laws was filed with the court.
On July 29, 2009, an Order Withdrawal And Substitution Of Lead Plaintiff was Granted by the court.
On March 25, 2010, by notice of the Lead Plaintiff the claims against Defendants, in the above-referenced action, were voluntarily dismissed his pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) without prejudice.
On May 20, 2010, another Lead Plaintiff voluntarily dismissed her claims against Defendants in the action pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) without prejudice.
On June 10, 2010, a Memorandum and Order was issued by the Court granting the defendants' motions to dismiss
On June 14, 2010, according to a Judgment, the Court ruled that the defendants' motions to dismiss were granted.