Former UBS Broker Files Whistle-Blower Suit
While he was a broker for UBS Financial Services, Timothy Flynn sold $30 million in auction-rate securities to towns and cities in Massachusetts.
Now, the same broker has filed a whistle-blower lawsuit against his former employer claiming UBS retaliated against him for cooperating with state regulators and forced him to resign.
In “Former UBS broker files suit in U.S. over securities investigation,” Boston Globe reporter Beth Healy writes that Flynn met with investigators from the Massachusetts attorney general’s office on April 16. During the meeting, Flynn said that brokers had been led to believe auction-rate securities were cash alternatives.
Flynn alleged that his testimony led to a fraud suit filed in late June by the Massachusetts Securities Division against UBS.
A senior vice president, Flynn claims he was locked out of his office twice after UBS agreed to buy back $37 million in investments from 17 towns and cities as well as the Massachusetts Turnpike Authority. In early May, his hard drive was removed from his computer and access to clients was allegedly restricted. Flynn claims he was suspended then forced to resign.
Auction-rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.
In mid-February, the auctions for the investment instruments failed. That meant investors were unable to sell their securities. To this day, auction-rate securities investors find themselves owning frozen assets.
On May 8, Carey & Danis filed a class action lawsuit in the U.S. District Court for the Southern District of New York on behalf of persons who purchased auction rate securities from UBS AG (NYSE: UBS), UBS Securities LLC and UBS Financial Services Inc. between May 8, 2003 and Feb. 13, 2008 and who continued to hold the securities as of Feb. 13, 2008.
Auction-rate securities investors who wish to discuss their rights against any broker-dealer may contact Carey & Danis toll-free at 800-721-2519 or fill out our online contact form
