UBS Financial Services Inc. must pay nearly $81 million to an investor, Kajeet Inc., for damages related to auction-rate securities, according to a ruling Tuesday.
The decision by a Financial Industry Regulatory Authority arbitration panel holds UBS Financial liable for damages Kajeet incurred through its inability to access funds tied up in the auction rate securities market, which froze in February 2008. UBS Financial Services, Inc. is a unit of UBS AG.
A UBS spokeswoman said the company "strongly disagree[s] with the arbitration panel's decision on this legacy auction rate matter" and that the outcome is "unwarranted under both the facts and the law." UBS said it plans to ask a court to overturn the decision.
Kajeet, a Maryland marketer of cell phones for kids, initially sought $110 million for lost business when its cash was frozen in the investments. It filed the arbitration claim in 2009.