MontCo waiting to learn its share of USDOJ deal with Swiss bank

Montgomery County stands to receive funds from Swiss bank UBS AG in an agreement announced earlier this month by the Department of Justice, but nobody has yet contacted county officials about how to claim their share of the settlement, a county official said today.

Under the terms of the deal, the government agreed not to prosecute the company in return for UBS AG's admission that former employees at its municipal reinvestment and derivatives desks engaged in anti-competitive activity by illegally manipulating the municipal bonds markets between 2001 and 2006. The company also agreed to pay restitution to victims.

In connection with the Pennsylvania portion of the multi-state agreement, acting state attorney general Bill Ryan identified Montgomery County among 25 entities in the state that "may be eligible for restitution." The county would be paid from a $20 million restitution fund that the bank has established under the terms of the deal.

A similar deal between the government and Bank of America last December netted the county about $2 million out of a total settlement of $137.3 million.

According to the state attorney general's office, all of the Pennsylvania entities that are eligible to participate in the settlement were to be "contacted with instruction about how to file a claim."

Randy Schaible, chief financial officer for Montgomery County, was unaware of the UBS settlement agreement when contacted Friday afternoon.

"This is news to me. We haven't heard anything about a settlement, but we will definitely look into it right away," Schaible said by telephone.

"Nobody has contacted us," Schaible said.

Schaible confirmed that the county had received "just under two million" dollars in the Bank of America settlement.

"This settlement is expected to return significant amounts of restitution to organizations across Pennsylvania, including public school districts, cities, county governments, municipal authorities and state-related agencies," Ryan said when the agreement was announced on May 4.

"These agencies were seeking safe investments for bond issues, or attempting to reduce the cost of borrowing or manage their risks, but instead fell victim to a national scheme intended to artificially increase costs or boost profits for large banks, brokers and financial service firms," Ryan said.