The sound of one shoe dropping

UBS offers 112,000 sq.ft. for sublease. A commercial broker quoted in the article says this is just the first attempt to sublease a huge block of financial services space - the industry expects many more. I keep thinking of that Antares' principal's quote in the New Yorker, to the effect that he wasn't worried about charging such high rents to tenants at the old UST building in Greenwich because they were all hedge fund firms, "and these guys treat rent payments like lunch money bills." What if someone eats their lunch and steals their lunch money?

"Of course it's safe - trust us, we're Swiss!"

UBS - the next Bear Sterns?
If you believe these allegations - and I do - UBS peddled Lehman Brothers' notes as "Good for Retirement" when, of course, they were unsecured promissory instruments which are now worthless. UBS wasn't the only bank selling junk it described as valuable but they do seem to have engaged in a large number of activities like this or that were just plain illegal, and pretty much continue to insist they did nothing wrong even as they pay back billions. Those auction-rated securities come to mind - UBS was unloading them for its favored corporate clients while dumping them into private clients' accounts even when it knew they were illiquid. Aiding and abetting tax dodgers via Swiss banking secrecy laws hasn't helped the bank's reputation or its bottom line, now that federal prosecutors are on to them.

What gives with this bank? The people I know who work for UBS are outstanding individuals who would never act unethically - never. So how did rogues come to get free run at the place? It has to be the fault of upper management but, regardless of the cause, things look increasingly dismal for this institution.

Hey, Dickie - can I get an advance on my allowance?
UBS's general Counsel, David Aufhauser, agrees to disgorge $6.5 million in profits from illegal insider trading. Aufhauser, who presumably counseled UBS that its sales of mortgage rated securities was entirely ethical and legal (advice that cost it a whole bunch of billions of dollars in restitution earlier this year), turns out to have been trading on inside information. You may find that disturbing but rest assured; according to his bio, he's a recipient of the Treasury Department's highest honor, the "Alexander Hamilton Award". Phew! For a moment there, I was worried that we might have crooks on Wall Street.