UBS subsidiary faces lawsuit

The UBS subsidiary has come under fire over the Enron affair Keystone Archive

A class action suit has been launched in the United States against UBS's banking subsidiary, PaineWebber, in connection with the collapse of the energy giant, Enron.

UBS spokesman Christoph Meier confirmed a report in the financial weekly newspaper, “Cash”, that a lawsuit had been submitted. He said the bank was confident it would be able to defeat the challenge.

But Maier was unable to confirm earlier reports that the claims for damages or compensation ran into several hundred million dollars. “We don’t know the actual amount of the claim,” he said.

PaineWebber is accused of recommending Enron shares at a time when it was clear that the energy giant was facing financial difficulties. It is accused of profiting and acting in its own interests at the expense of its customers.

According to “Cash”, the lawsuit is also reported to include reference to a financial adviser at PaineWebber, who recommended Enron employees to sell any shares they had in the company. Those recommendations contravened official PaineWebber policy, and the adviser was fired.

Maier denied that the bank had tried to silence a critical voice and said the adviser had been asked to leave because he had broken company rules.

swissinfo with agencies