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UBS bond executive exits amid turmoil

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Bloomberg News / August 28, 2008
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NEW YORK - David Shulman, UBS AG's global head of municipal securities, left in the wake of settlements by the bank with state and federal regulators over the sale of auction-rate securities before the market collapse in February.

Shulman officially departed Aug. 15, UBS spokeswoman Karina Byrne said yesterday, declining to elaborate. Reached by telephone outside the office, Shulman declined to comment. He was placed on administrative leave in July.

Shulman is the second high-level executive to leave UBS after the Zurich-based bank was accused of falsely marketing the bonds as safe, liquid investments. UBS's top US legal official, David Aufhauser, resigned earlier this month.

Shulman, who was also fixed-income chief for the Americas, led the sales effort to decrease UBS's inventory of auction-rate securities, according to Massachusetts Secretary of State William Galvin, who sued the company June 26. New York sued a month later, before settling.

UBS settled the suits and other probes earlier this month, agreeing to buy back $18.6 billion in auction-rate securities and to pay $150 million in fines in a deal with New York State Attorney General Andrew Cuomo, the Securities and Exchange Commission, and other state regulators.

In his suit, Cuomo accused seven unidentified UBS executives of selling $21 million in personal holdings of auction-rate securities while the company pushed the instruments to customers.

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