2nd Circ. Sends UBS, Hospital ARS Fight To Arbitration

Law360, New York (September 22, 2011, 9:07 PM EDT) -- The Second Circuit on Thursday affirmed a lower court's ruling forcing UBS AG into arbitration with a West Virginia hospital company in a dispute over $329 million in auction rate securities.

In a 2-1 ruling, the appeals court said West Virginia United Health System Inc. is considered a UBS customer under Financial Industry Regulatory Authority rules, entitling FINRA to compel arbitration for the claims against UBS about misrepresentations concerning the ARS market.

UBS had argued that the hospital company should not be considered a customer because...
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