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09 Feb 2010 Register / Login F F F
12 May 2008

Plug Power sues adviser for student loan investments

It has been claimed that Plug Power has filed a law suite against UBS Financial Services regarding its investment portfolio.

It is alleged that in January UBS Financial Services invested US$62.9 million of Plug Powers funds in auction rate securities backed by federally guaranteed student loans.

Plug alleges UBS broke its fiduciary duties by investing in securities it was not authorised to invest in, namely ARS with interest rate caps.

“Specifically, UBS knowingly supplied false information with regard to the liquidity of the ARS in which Plug Power’s assets were invested. UBS stated that the ARS were virtually equivalent to money market investments or cash,” the suit states.

“There is no immediate concern, but it’s something we want to take care of quickly,” said Plug spokesman Eoin Connolly.

In announcing its first quarter results Thursday, Plug posted a $2.8 temporary impairment charge related to the ARS. The company said it will hold the securities and wait for a successful auction or sell them in the open market.

In the suit, Plug accuses UBS of breach of fiduciary duty, fraud, breach of contract and negligent misrepresentation. Plug wants a federal judge to issue a declaratory judgement voiding UBS’ transactions. It is also seeking unspecified compensatory and punitive damages and the disgorgement of profits UBS realised from the alleged improper transactions.

UBS Financial Services has been the companies financial adviser since 2005.

 

Source: Fuel Cell Today

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