Interceptor
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Big Swiss Bank Receives a Warning Notice From the S.E.C.
By HEATHER TIMMONS
ONDON, Dec. 21 - Switzerland's largest bank, UBS, said Tuesday that it might face legal action from the Securities and Exchange Commission over work it did for HealthSouth, the hospital operator accused of nearly $3 billion in accounting fraud.
UBS said that it had received a Wells notice - a letter warning that an individual or company will probably face a civil complaint from the commission - from the S.E.C., and that it was continuing to cooperate with the regulator.
A UBS spokesman, Mark Arena, said the S.E.C. notice did not mention any bank employees by name. UBS now has the opportunity to present its position before the S.E.C. makes any formal recommendation.
The S.E.C.'s stepped-up involvement is the latest move in a several-year investigation into HealthSouth. The company's founder, Richard M. Scrushy, was indicted last year for inflating profits by $2.74 billion from 1996 to 2001. This fall, new charges of perjury and obstruction of justice were brought against him, and he faces a trial in January.
From 1998 to 2002, UBS and other banks underwrote and sold more than $4 billion in securities. UBS has said that it had no knowledge of accounting fraud at HealthSouth. Mr. Arena said Tuesday that the bank had no further comment.
The bank's stock traded down slightly on the European exchanges on the news, and closed down 0.84 percent in London, at £4.27 ($8.31).
"It's not a new issue" for UBS, but it is still embarrassing, said Ricardo Kleinbaum, a BNP Paribas analyst who rates European bank debt.
Any fines that the S.E.C. may dole out are expected to be small, compared with UBS's total capital, Mr. Kleinbaum said. But, he added, UBS would have a hard time making an acquisition in the United States right now, because the Federal Reserve would balk at approving the transaction while the S.E.C. is considering civil action.
Regulators, the Department of Justice, shareholders' lawyers and HealthSouth executives have been trying to reconstruct how the fraud was carried out. Congressional investigators have also been looking into UBS's involvement in HealthSouth's accounting. UBS executives testified in Congress last year that they had no knowledge of the fraud.
An investors' suit filed this January contends that UBS and the accounting firm Ernst & Young were aware of the fraud before HealthSouth's financial problems came to light last year. The suit, filed by Bernstein Litowitz Berger & Grossmann in New York, cited conversations with an unnamed senior executive at HealthSouth who has since been identified as the chief financial officer, Michael D. Martin.
In June, Mr. Martin was fined and received probation, rather than jail time, because of his cooperation with prosecutors and current HealthSouth executives in unraveling the fraud.
Ernst & Young has not received a Wells notice, an executive close to the accounting firm said on Tuesday.
http://www.nytimes.com/2004/12/22/b...7;20AG&pagewanted=print&position=&oref=slogin
No body trusts the Swiss Bank
By HEATHER TIMMONS
ONDON, Dec. 21 - Switzerland's largest bank, UBS, said Tuesday that it might face legal action from the Securities and Exchange Commission over work it did for HealthSouth, the hospital operator accused of nearly $3 billion in accounting fraud.
UBS said that it had received a Wells notice - a letter warning that an individual or company will probably face a civil complaint from the commission - from the S.E.C., and that it was continuing to cooperate with the regulator.
A UBS spokesman, Mark Arena, said the S.E.C. notice did not mention any bank employees by name. UBS now has the opportunity to present its position before the S.E.C. makes any formal recommendation.
The S.E.C.'s stepped-up involvement is the latest move in a several-year investigation into HealthSouth. The company's founder, Richard M. Scrushy, was indicted last year for inflating profits by $2.74 billion from 1996 to 2001. This fall, new charges of perjury and obstruction of justice were brought against him, and he faces a trial in January.
From 1998 to 2002, UBS and other banks underwrote and sold more than $4 billion in securities. UBS has said that it had no knowledge of accounting fraud at HealthSouth. Mr. Arena said Tuesday that the bank had no further comment.
The bank's stock traded down slightly on the European exchanges on the news, and closed down 0.84 percent in London, at £4.27 ($8.31).
"It's not a new issue" for UBS, but it is still embarrassing, said Ricardo Kleinbaum, a BNP Paribas analyst who rates European bank debt.
Any fines that the S.E.C. may dole out are expected to be small, compared with UBS's total capital, Mr. Kleinbaum said. But, he added, UBS would have a hard time making an acquisition in the United States right now, because the Federal Reserve would balk at approving the transaction while the S.E.C. is considering civil action.
Regulators, the Department of Justice, shareholders' lawyers and HealthSouth executives have been trying to reconstruct how the fraud was carried out. Congressional investigators have also been looking into UBS's involvement in HealthSouth's accounting. UBS executives testified in Congress last year that they had no knowledge of the fraud.
An investors' suit filed this January contends that UBS and the accounting firm Ernst & Young were aware of the fraud before HealthSouth's financial problems came to light last year. The suit, filed by Bernstein Litowitz Berger & Grossmann in New York, cited conversations with an unnamed senior executive at HealthSouth who has since been identified as the chief financial officer, Michael D. Martin.
In June, Mr. Martin was fined and received probation, rather than jail time, because of his cooperation with prosecutors and current HealthSouth executives in unraveling the fraud.
Ernst & Young has not received a Wells notice, an executive close to the accounting firm said on Tuesday.
http://www.nytimes.com/2004/12/22/b...7;20AG&pagewanted=print&position=&oref=slogin
No body trusts the Swiss Bank
Interceptor is desperately slinging mud in order to show that his precious PPP leader is not dirty .....It's kind of pathetic....
