INDIANAPOLIS - Financial Services UBS has agreed to pay regulators of Indiana $677,000 Thursday to settle a claim that she has sold "unsuitable investments" to a now extinct teachers union health care trust.
The claim arises out of $ 16.2 million which the Indiana State Teachers Association Insurance Trust invested in funds of private capital 13 from 2004 to 2009. A settlement of consent signed by UBS (UBS - news - people) and the Division of values securities Indiana shows that the company agreed to pay a fine of $450,000 and $227,000 of costs.
Details of the colony, including investment concerned, have not been released. It follows a separate regulation between the Indiana State Teachers Association, and UBS in which the company has agreed to buy some of the funds of the union, pursuant to the consent agreement.
ISTA of 50,000 members was resumed by the Association of national education in May 2009, after the State of the Department of insurance said that his confidence of insurance had a net value of negative $ 67 million. ISTA sued former officials and financial advisors three months later, saying that they poorly managed the trust.
Other claims by and against ISTA are still pending.
"We are pleased to see a resolution of this part of an ongoing investigation into other violations related to unrest surrounding ISTA," White Charlie Indiana Secretary of State, whose Office includes the Division of securities, said in a statement written Thursday.
UBS did not admit or deny any responsibility with the regulations.
A spokesman of the company "UBS fully cooperated with the Division of securities throughout its investigation, and the company is pleased that this issue has been resolved", Karina Byrne said in a statement issued by the headquarters of the city of New York.
ISTA spokesman Mark Shoup said that the union did not comment on the regulations.
The Division of values securities Indiana continues ISTA and the National Association of education in the Federal Court on the amounts owed to more than 20 school districts in Indiana by the trust. The State agency alleges that ISTA said school districts, they would earn returns on reserves of the left in the trust of insurance, but this money has been mixed with other funds, and that the association of teachers cannot explain correctly for 23 million for schools.
ISTA has since sold his downtown Indianapolis building to the PBN and at least 40 employees on foot. Teachers already brought an action for damages of ISTA and many of the same defendants.
In October, representatives of the State of securities filed an administrative complaint against a financial advisor who advised ISTA while working for UBS and Morgan Stanley (MS - news - people). The Agency said the agent notified officials in early in 2004 to develop the trust money in alternative investments such as hedge funds and funds that had long-term risks but offered large initial commissions.
The complaint contends he is not also say ISTA risk or what his company compensation and he would receive.
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