UBS says legal reserves stand at $2.5 billion, details Puerto Rico probes
ZURICH (Reuters) - UBS said its provisions to deal with future legal tussles and regulatory run-ins stood at 2.368 billion Swiss francs ($2.46 billion) in June and revealed a widening U.S. probe into bond funds sold by the Swiss bank's Puerto Rico arm.
Zurich-based UBS' current legal reserves were disclosed in its second-quarter report on Tuesday, which came one day after its results.
The bank said it is responding to inquiries from the Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) over the practice by some of its customers and one bank adviser of using loans to invest in closed-end funds in Puerto Rico.
"We also understand that the Department of Justice is conducting a criminal inquiry into the practice of certain customers and a UBS financial advisor of using non-purpose loans to invest in closed end fund securities in violation of their loan agreements and UBS policies," the bank said.
The bank said it is cooperating in the investigations.
(Reporting by Katharina Bart; Editing by Muralikumar Anantharaman)
