UBS lawyer Aufhauser at center of NY probe-source

[Joanne98]

Source: Reuters

NEW YORK, Aug 1 (Reuters) - David Aufhauser, the general counsel for UBS AG's (UBSN.VX: Quote, Profile, Research) investment banking unit, is at the center of a civil probe by New York Attorney General Andrew Cuomo into the Swiss bank's sales of auction-rate securities, a person familiar with the situation said on Friday.

Last week, Cuomo sued UBS and accused it of committing fraud by steering clients into auction-rate securities that became impossible to sell once the credit market tightened. Cuomo contends UBS insiders dumped their own holdings even as the bank continued to sell the debt to clients.

Aufhauser is the executive who was described in the lawsuit only as "Executive A," said the source, who asked not to be named. According to the lawsuit, he was part of an executive group that looked into a series of problems related to auctions managed by UBS.

Shortly after exchanging messages with other UBS executives about the increasing difficulty with auctions, Aufhauser sent an e-mail to his broker asking to shed all of his $250,000 in personal auction-rate holdings, according to the lawsuit.

The New York AG's office did not respond to requests for comment. UBS declined to comment on Executive A's identity.

"The New York attorney general did not identify the names of the executives in his complaint, and we decline to do so," the bank said in a statement.

Aufhauser, who is still an employee of UBS, was not available for comment.

Aufhauser, who joined the bank in 2004 and was formerly a general counsel to the U.S. Treasury Department, later bought back some auction-rate securities, the lawsuit said. No charges have been filed against him or any other individual.



Read more: http://uk.reuters.com/article/bondsNews/idUKN0132376420080801

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Aufhauser was the guy who got Saddam's money.

[bluesmail]

1. This. The anthrax 'murder'. KKKRove in contempt. Judge Bates

ruling on Miers. Too many to list. They MUST be getting close. I really hope they don't blow it.

[Joanne98]

2. Here's another one. Cuomo sues Citigroup...........Citi destroyed docs

Aug. 1 (Bloomberg) -- New York Attorney General Andrew Cuomo plans to sue Citigroup Inc., the largest U.S. bank by assets, after accusing it of ``fraudulent'' tactics in selling auction-rate securities as safe, money market-like investments.

Citigroup destroyed ``documents under subpoena,'' Cuomo said in a ``letter of intent' sent today to the bank following a five-month investigation by his office. He said he plans to ``charge'' the bank under the state's Martin Act, which permits civil suits and criminal action in securities cases. Cuomo offered details for a possible settlement of the matter. He won't sue if his terms, including a fine, are met, spokesman Alex Detrick said.

``The investigation has revealed that Citigroup has repeatedly and persistently committed fraud by making material misrepresentations and omissions in connection with Citigroup's underwriting, distribution and sale of auction-rate securities,'' Cuomo said in the letter.

Citigroup's sale of auction-rate securities also is being investigated by the U.S. Securities and Exchange Commission, the bank said today. Citigroup and other firms that sold the securities have received subpoenas and information requests from state, federal and industry regulators, the bank said in an SEC filing. The states include Massachusetts, New York and Texas, Citigroup said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axwBGlIzbGp8&refer=home

[cyberpj]

3. Speaking of UBS - has anyone heard anything else on the secret Swiss accounts lately?

not a peep that I can find.

[karynnj]

4. Here is a Senate Finance committee hearing on the Cayman Islands being used

to hide income from the IRS. This is an international problem and it - like the work on BCCI and international money laundering show why all nations need transparency in banking. Baucus is chair - bbut the most interesting discussion is when Kerry is up (I think about 50 minutes in). Jack Blum who Kerry hired for the committee that exposed BCCI was there. (I'm not biased or anything :) )

Everything said about secret accounts in the Cayman Islands is true for Switzerland.

Click where indicated to hear the July 24 hearing.
http://finance.senate.gov/sitepages/hearings.htm