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UBS agrees to pay $2.5 million to settle bondholders lawsuit

On Behalf of | Jul 21, 2023 | Regulatory Investigations

A settlement has been reached in connection with a class-action lawsuit filed by clients of UBS Financial Services, AdvisorHub reports.

UBS agreed to pay $2.5 million to settle the lawsuit filed by bondholders who asserted common law claims for breach of contract and negligence.

The suit was originally brought by Richard Goodman in 2021 on behalf of himself and other clients who claimed that UBS incorrectly reported tax information. The investors had purchased taxable municipal bonds that were held in a brokerage account controlled by UBS.

They claimed the bank did not report amortizable bond premiums on tax forms that the clients used to prepare their returns. This resulted in substantial overstatement of taxable income and overpayment of taxes, the suit alleged.

The settlement received preliminary approval last week from a federal judge in New Jersey. Another hearing will be held in December to arrive at a final determination in the case.

Under the terms, UBS will be required to pay the $2.5 million into an interest-bearing escrow account to be distributed among the members of the settlement class.

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