UBS Can't Duck FINRA Arbitration Over $125M ARS

Law360, New York (February 12, 2013, 4:37 PM EST) -- UBS Securities LLC must arbitrate claims by a Minnesota hospital chain over $125 million in soured auction-rate securities, a federal judge ruled Monday, dealing another setback to banks seeking to escape the Financial Industry Regulatory Authority’s jurisdiction.

Under FINRA rules, Allina Health System is a “customer” of UBS, which helped underwrite an October 2007 ARS transaction that went south in the run-up to the financial crisis, U.S. District Judge Michael J. Davis said. Allina launched a FINRA arbitration in February 2012, prompting UBS to sue the...
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