Whistleblower Lawsuit Filed By Former UBS Employee Over ARS-Fraud Probe

Former broker, Timothy Flynn, has filed a lawsuit against his former employer, UBS, claiming that he was forced to resign his employment after he assisted regulators probing UBS’s auction-rate securities sales tactics in Massachusetts.  This lawsuit follows in the wake of the lawsuit filed by the State of Massachusetts against UBS in which the State charges the financial giant with defrauding its investors by telling them that ARS were safe alternatives to money-market funds with equal liquidity.

Flynn testified in April to the Massachusetts Attorney General about violations of the law with regard to UBS’s sale of ARS.  The lawsuit alleges that UBS knew of Flynn’s testimony and retaliated against him by locking him out of his office and destroying his book of business. 

Flynn, who was a senior vice president at UBS, sold $30 million of ARS in approximately 2 years.  UBS has denied the allegations in Flynn’s lawsuit and taken the position that Flynn voluntarily resigned his employment.