Connecticut and 23 states and the District of Columbia reached a $90.8 million settlement with Swiss bank UBS AG, with U.S. headquarters in Stamford, over alleged bid-rigging and other misconduct in the municipal bond derivatives industry.
In addition, Attorney General George Jepsen said UBS agreed to pay a $2.5 million civil penalty and $5 million in fees and costs of the investigation to the settling states.
In all, UBS said Wednesday it agreed to a $160.3 million settlement — $90.8 million to the states and the balance to the federal government.
Of the $90.8 million, $63.3 million in restitution will go to state agencies, municipalities, school districts and nonprofit entities nationwide that entered into municipal derivative contracts with UBS, or used UBS as its broker for such transactions, between 2001 and 2004.Â
Connecticut’s precise share of the settlement won’t be known until the formal mechanism for submitting claims is put in place, said Jepsen spokeswoman Susan Kinsman.
But several damaged parties entitled to share in the settlement include: the cities of Bridgeport and Stamford; the Connecticut Housing Finance Authority; St. Raphael’s Hospital; and the South Central Connecticut Regional Water Authority.
The settlement also requires UBS to pay $20 million in restitution directly to certain other government and nonprofits as part of a separate agreement it entered into Wednesday with the U.S. Securities and Exchange Commission.
In a statement, UBS blamed the misconduct on former employees.
“UBS is pleased to have resolved this matter with its regulators,” it said.
The investigation is ongoing.
