UBS finalized settlements with the Securities and Exchange Commission (SEC) and the New York Attorney General on December 11, 2008, to restore liquidity to clients with certain auction rate securities (ARS). The most comprehensive settlements of their kind, they include individuals, charitable and non-profit organizations, small businesses, governments, corporations and institutions. The firm concluded a similar agreement with the Massachusetts Securities Division on October 2, 2008.

Through its ARS Rights offer, UBS will offer to purchase Eligible ARS at par from current or former clients who held ARS at UBS as of February 13, 2008, or who purchased their ARS at UBS between October 1, 2007, and February 13, 2008, and subsequently transferred them to another firm. Eligible ARS are auction rate securities that were not successfully clearing at auction between February 13, 2008, and October 7, 2008.

Current and former clients who are eligible for the ARS Rights offer were notified in October and November, and were provided instructions regarding how to accept the firm's offer.

Detailed information regarding the firm's settlement with the SEC is available in UBS's August 8, 2008, press release. UBS has also created a tool for investors with Eligible ARS to determine current interest rates and/or dividends for their specific ARS holdings; security identifiers (knowns as CUSIPs) were included in the letters that were mailed to eligible current and former clients.

Current and former clients should contact their UBS Financial Advisors (or Branch Managers at their former branches) with questions, or contact us by e-mail.