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ot:Inquiry Asks If UBS Ratings Were Leaked
By RANDALL SMITH
February 27, 2007; Page C8

Securities regulators are investigating whether hedge-fund stock traders may have improperly obtained advance word of stock ratings changes at UBS AG, according to people familiar with the case.

The probe, being conducted by federal prosecutors in New York and regulators at the Securities and Exchange Commission, is part of a wider-ranging case that could result in charges, one of the people said.

The regulators are probing whether a UBS employee in New York sold advance information about the ratings changes to traders at hedge funds, according to the online edition of Business Week, which reported the probe yesterday.

A UBS spokesman declined to comment.

The case comes as regulators intensify their scrutiny of possible means by which hedge funds may obtain market-moving information before other investors.

The probe is the latest example of the SEC's "extremely aggressive enforcement efforts regarding hedge funds, especially with respect to insider trading and informational advantages," said Jerry Isenberg, a former SEC official now at the firm of Alston & Bird in Washington.

Write to Randall Smith at randall.smith@wsj. com