BOSTON, May 8 (UPI) -- UBS Financial Services Inc. has agreed to buy $6.8 million in bonds from Winchester, Mass., as part of a $37 million settlement, officials said.
Winchester was the largest investor in UBS municipal debt securities that the firm touted as being almost as easy to withdraw from as a cash account, The Boston Globe reported Thursday.
But, when the auctions for these securities collapsed in February, the municipalities found themselves holding bonds they could not use to pay their bills.
Massachusetts Attorney General Martha Coakley said there has been "a heavy push" for brokers to sell new financial products and "a rush by cities and towns to take advantage of what appeared to be a burgeoning market."
UBS spokeswoman Karina Byrne said the company was "pleased this matter has been resolved," but also said the settlement was based on a Massachusetts law and was a one-time event, the Globe reported.
In the settlement, UBS agreed to buy $6.1 million in bonds back from Barnstable, Mass., $4.4 million from the Massachusetts Turnpike Authority and $3.2 million from the city of Holyoke.
"Manna from heaven," said Holyoke Mayor Michael J. Sullivan.