Conneticut Law Tribune – Stamford Superior Court Judge John F. Blawie ordered the international investment giant to post the funds in advance of litigation, stating that the hedge fund established probable cause that UBS sold the debt instruments even though it had inside information that major credit rating agencies were just about to downgrade them.
“The court takes UBS employees at their word when they referenced their Notes, these purported ‘investment grade’ securities which they sold, as ‘crap’ and ‘vomit,’ for UBS alone possessed the knowledge of what their product, their inventory, was truly worth,” the judge wrote.
In a statement, UBS noted that Blawie’s ruling is only “preliminary” and said it had confidence it would win the case on the merits.
