A federal judge in Houston has thrown out a lawsuit accusing UBS Group AG of hiding fraud by its client Enron Corp from retail customers, a decision that may end a 15-year legal battle stemming from the energy company's December 2001 bankruptcy.
In a 228-page decision on Tuesday, U.S. District Judge Melinda Harmon said UBS PaineWebber brokerage customers failed to show that the Swiss bank intended to defraud them into buying Enron securities.
The customers accused UBS of trying to generate more fees by taking part in five transactions with Enron, such as loans and note offerings, that had no legitimate business purpose and that were designed to create a facade that Enron was healthy.
But the judge said: "It was Enron (and its accountants and lawyers) ... that was responsible for using these transactions to 'cook its books,' creating its allegedly fraudulent financial statements," and ultimately defrauding the investing public.
The plaintiffs failed to specify "exactly what nonpublic, material information the UBS entities knew about Enron, who discovered it, when, how, and under what circumstances and why it was fraudulent," Harmon wrote. http://www.reuters.com/article/us-ubs-group-enron-idUSKBN16851X?feedType=RSS&feedName=businessNews&utm_source=Twitter&utm_medium=Social&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29
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