2003-04-28 sec-litreleases pdf 15 KB 4,264 chars

SEC v. : 03 Civ. 2943 (WHP)

Exhibit of Federal Court Approves Settlement of SEC Enforcement Actions Involving Conflicts of Interest Between Research and Investment Banking
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summary

UBS Securities LLC agreed to establish a distribution fund to compensate investors who purchased Triangle Pharmaceuticals and Interspeed stock during 1999–2000, with additional issuers added if funds remained, as part of a 2003 SEC enforcement judgment without admission of guilt.

paragraph

UBS Securities LLC, formerly UBS Warburg LLC, was subject to a 2003 Final Judgment by the U.S. District Court for the Southern District of New York following an SEC enforcement action, requiring the creation of a Distribution Fund from its federal payment plus interest. The fund was designated to compensate investors who bought Triangle Pharmaceuticals (Oct. 8, 1999–Mar. 10, 2000) and Interspeed (Jan. 3, 2000–Jul. 21, 2000) equity securities through UBS, with Flextronics (Mar. 2–Jun. 1, 2001) and Atmel (Feb. 9–May 9, 2000) added as secondary issuers if funds remained. The court explicitly stated this order was purely administrative, made no finding of fraud, and had no precedential effect.

narrative

UBS Securities LLC, formerly UBS Warburg LLC, was ordered by the U.S. District Court for the Southern District of New York in October 2003 to establish a Distribution Fund as part of a Final Judgment in a securities enforcement action brought by the SEC. The fund, financed by UBS’s federal payment and any accrued interest, was designed to compensate investors who purchased specific equity securities through UBS during designated time periods. The court identified Triangle Pharmaceuticals (Oct. 8, 1999–Mar. 10, 2000) and Interspeed, Inc. (Jan. 3, 2000–Jul. 21, 2000) as the primary securities in question, with Flextronics International, Ltd. (Mar. 2–Jun. 1, 2001) and Atmel Corp. (Feb. 9–May 9, 2000) added as secondary issuers if funds remained after primary allocations. The Distribution Fund Administrator was tasked with formulating and administering a plan to distribute payments equitably and cost-effectively to eligible recipients. Importantly, the court emphasized that this order was purely procedural, made no judicial finding of fraud or liability, and was not intended to have precedential effect in other cases. The underlying nature of the alleged misconduct—such as improper trading or market manipulation—was not detailed in this document. No total dollar amount for the fund or specific admissions of guilt by UBS were disclosed in the order.

Enriched metadata

Scheme
market-manipulation (60%)
Court
Southern District of New York
Classified market-manipulation(confidence 60%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →
Parties
Securities and Exchange CommissionUbs Securities Llc
Keywords
distribution fundequity securitiesdistributionsecuritiesfundsecurities questionquestion relevantrelevant periodperiod purchaseequityfund planeligible distributionrelevantpurchasefund recipients

Extracted insights

Entities 5
  • company creation of a distribution fund
  • company distribution fund
  • person final judgment
  • agency Securities and Exchange Commission
  • company ubs securities llc
Triples 13
  • Securities And Exchange Commission sued Ubs Securities Llc
  • Court signed Final Judgment
  • Final Judgment called for creation of a Distribution Fund
  • Distribution Fund consisted of Defendant’s Federal Payment plus any income and interest
  • Distribution Fund Administrator shall formulate Distribution Fund Plan
  • Distribution Fund Plan intended to provide equitable, cost-effective distribution of funds to Eligible Distribution Fund Recipients
  • Eligible Distribution Fund Recipient must have purchased equity securities in question through Defendant during the relevant period of purchase
  • Court ordered equity securities in question and relevant period of purchase for Triangle Pharmaceuticals, Inc. from Oct. 8, 1999 to March 10, 2000
  • Court ordered equity securities in question and relevant period of purchase for Interspeed, Inc. from Jan. 3, 2000 to July 21, 2000
  • Court ordered equity securities in question and relevant period of purchase for Flextronics International, Ltd. from March 2, 2001 to June 1, 2001
  • Court ordered equity securities in question and relevant period of purchase for Atmel Corp. from Feb. 9, 2000 to May 9, 2000
  • Distribution Fund Plan allocates payments to Eligible Distribution Fund Recipients who purchased equity securities of Triangle Pharmaceuticals, Inc. and Interspeed, Inc.
  • Distribution Fund Plan allocates payments to Eligible Distribution Fund Recipients who purchased equity securities of Flextronics International, Ltd. and Atmel Corp.
PDF
SEC v. : 03 Civ. 2943 (WHP) · Source
Text layers
Extracted body text (4,264c) 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
________________________________________________ 
        : 
SECURITIES AND EXCHANGE COMMISSION, : 
        : 
                                                Plaintiff,                                    :            Civil            Action            No.            
        : 
                        -against-                                                            :            03            Civ.            2943            (WHP)            
        : 
UBS SECURITIES LLC, f/k/a    : 
UBS            WARBURG            LLC,                                                            :            
        : 
    Defendant.   : 
________________________________________________: 
 
ORDER REGARDING DISTRIBUTION FUND PLAN 
 
 On October 31, 2003, the Court signed a Final Judgment as to Defendant UBS Securities 
LLC, f/k/a UBS Warburg LLC (“Final Judgment”).  Section II of the Final Judgment calls for the 
creation of a Distribution Fund, which consists of Defendant’s Federal Payment plus any income 
and interest earned thereon.
1
  Under Section V.A of the Final Judgment, “[t]he Distribution Fund 
Administrator shall formulate and administer a Distribution Fund Plan ... intended to provide for 
the equitable, cost-effective distribution of funds to Eligible Distribution Fund Recipients.”  
Under Section V.C.1 of the Final Judgment, to be an Eligible Distribution Fund Recipient, a 
person must have purchased “equity securities in question” through Defendant during the 
“relevant period of purchase.”  Also under Section V.C.1, “[i]dentification of the ‘equity 
securities in question’ and the ‘relevant period of purchase’ for each such equity security will be 
set forth (solely for the purpose of administering the Distribution Fund Plan) in a further order of 
the Court.” 
 Accordingly, IT IS HEREBY ORDERED that the “equity securities in question” and the 
                                                
 
1
 All defined terms in the Final Judgment apply to this Order. 

“relevant period of purchase” for each such equity security, as those terms are used in Section 
V.C.1 of the Final Judgment, are as follows:   
 
Equity Securities in Question   Relevant Period of Purchase
 Triangle Pharmaceuticals, Inc.  Oct. 8, 1999 – March 10, 2000 
 Interspeed, Inc.    Jan. 3, 2000 – July 21, 2000 
 
IT IS FURTHER ORDERED that the Distribution Fund Administrator shall formulate a 
Distribution Fund Plan that allocates payments (i) in the first instance to Eligible Distribution 
Fund Recipients who purchased the equity securities of Triangle Pharmaceuticals, Inc. and 
Interspeed, Inc. during the relevant period of purchase for such securities; and (ii) if such 
allocation does not exhaust the amount of funds in the Distribution Fund or expected to be in the 
Distribution Fund at the time of payment to Eligible Distribution Fund Recipients, in the next 
instance to Eligible Distribution Fund Recipients who purchased the equity securities of the 
following additional issuers, which securities will also be deemed “equity securities in question” 
during the “relevant period of purchase” identified below for such securities: 
 
Equity Securities in Question   Relevant Periods of Purchase
Flextronics International, Ltd.   March 2, 2001 – June 1, 2001 
 Atmel Corp.     Feb. 9, 2000 – May 9, 2000 
 
The identification of “equity securities in question” and “relevant periods of purchase” made in 
this Order is solely for the purpose of facilitating the efficient administration of the Distribution 
Fund Plan, is not a judicial or Commission finding, and is not intended to have precedential 
effect in other actions. 
            SO            ORDERED.            
Dated: New York, New York 
            October            31,            2003            
 
                                                                        ________________________________            
                                                                        WILLIAM            H.            PAULEY            III            
                                                                        UNITED            STATES            DISTRICT            JUDGE            
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OCR text (3,573c · tika · 95% conf) 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
________________________________________________ 
        : 
SECURITIES AND EXCHANGE COMMISSION, : 
        : 
    Plaintiff,   : Civil Action No. 
        : 
  -against-     : 03 Civ. 2943 (WHP) 
        : 
UBS SECURITIES LLC, f/k/a    : 
UBS WARBURG LLC,     : 
        : 
    Defendant.   : 
________________________________________________: 
 

ORDER REGARDING DISTRIBUTION FUND PLAN 
 
 On October 31, 2003, the Court signed a Final Judgment as to Defendant UBS Securities 

LLC, f/k/a UBS Warburg LLC (“Final Judgment”).  Section II of the Final Judgment calls for the 

creation of a Distribution Fund, which consists of Defendant’s Federal Payment plus any income 

and interest earned thereon.1  Under Section V.A of the Final Judgment, “[t]he Distribution Fund 

Administrator shall formulate and administer a Distribution Fund Plan … intended to provide for 

the equitable, cost-effective distribution of funds to Eligible Distribution Fund Recipients.”  

Under Section V.C.1 of the Final Judgment, to be an Eligible Distribution Fund Recipient, a 

person must have purchased “equity securities in question” through Defendant during the 

“relevant period of purchase.”  Also under Section V.C.1, “[i]dentification of the ‘equity 

securities in question’ and the ‘relevant period of purchase’ for each such equity security will be 

set forth (solely for the purpose of administering the Distribution Fund Plan) in a further order of 

the Court.” 

 Accordingly, IT IS HEREBY ORDERED that the “equity securities in question” and the 

                                                 
1 All defined terms in the Final Judgment apply to this Order. 



“relevant period of purchase” for each such equity security, as those terms are used in Section 

V.C.1 of the Final Judgment, are as follows:   

 Equity Securities in Question   Relevant Period of Purchase
 Triangle Pharmaceuticals, Inc.  Oct. 8, 1999 – March 10, 2000 
 Interspeed, Inc.    Jan. 3, 2000 – July 21, 2000 
 

IT IS FURTHER ORDERED that the Distribution Fund Administrator shall formulate a 

Distribution Fund Plan that allocates payments (i) in the first instance to Eligible Distribution 

Fund Recipients who purchased the equity securities of Triangle Pharmaceuticals, Inc. and 

Interspeed, Inc. during the relevant period of purchase for such securities; and (ii) if such 

allocation does not exhaust the amount of funds in the Distribution Fund or expected to be in the 

Distribution Fund at the time of payment to Eligible Distribution Fund Recipients, in the next 

instance to Eligible Distribution Fund Recipients who purchased the equity securities of the 

following additional issuers, which securities will also be deemed “equity securities in question” 

during the “relevant period of purchase” identified below for such securities: 

 Equity Securities in Question   Relevant Periods of Purchase
Flextronics International, Ltd.   March 2, 2001 – June 1, 2001 

 Atmel Corp.     Feb. 9, 2000 – May 9, 2000 
 
The identification of “equity securities in question” and “relevant periods of purchase” made in 

this Order is solely for the purpose of facilitating the efficient administration of the Distribution 

Fund Plan, is not a judicial or Commission finding, and is not intended to have precedential 

effect in other actions. 

 SO ORDERED. 

Dated: New York, New York 
 October 31, 2003 
 
      ________________________________ 
      WILLIAM H. PAULEY III 
      UNITED STATES DISTRICT JUDGE 

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