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Ex-UBS top lawyer settles insider trading case


    NEW YORK (Reuters) - A former top lawyer at UBS AG has agreed to pay $6.5 million to settle accusations that he sold his personal holdings of auction-rate securities after acquiring insider information about the collapsing market for the debt, New York's attorney general said.

    David Aufhauser, who had been general counsel of UBS (UBSN.CH)AG's global investment bank operations, is also subject to a two-year ban from the securities industry and from practicing law in the state for two years under the terms of the settlement, said Attorney General Andrew Cuomo on Tuesday.

    Cuomo said Aufhauser did not admit or deny the accusations in agreeing to the settlement.

    The attorney general also said there was an "ongoing investigation," when asked whether his office was looking at trading activity of other Wall Street executives.

    A spokesman for Aufhauser said: "We are pleased to have reached this amicable agreement and avoided a potentially lengthy litigation." The statement said the trading activity at issue resulted in no personal profit for Aufhauser.

    A UBS spokeswoman declined to comment on the settlement. She said Aufhauser left the firm at the end of September.

    (Reporting by Martha Graybow, editing by Leslie Gevirtz and Gerald E. McCormick)