Judge says Plug Power can pursue claim over UBS investments

Plug Power Inc. won a victory Wednesday in its $63 million auction-rate securities lawsuit against Swiss brokerage firm UBS AG. U.S. District Court Judge Gary Sharpe denied a motion by UBS to dismiss, allowing the case to move toward trial.

Plug filed the lawsuit in May, claiming that UBS, its investment broker, was aware it was investing Plug's cash in risky investments that were about to fail.

In a settlement with regulators, including New York Attorney General Andrew Cuomo, UBS has agreed to repurchase $19 billion of auction-rate securities sold to retail investors and institutions. Plug has said it will press on with the lawsuit despite that agreement.

Plug, which lost $22 million during the second quarter of the year, has already had to write off more than $5 million of its auction-rate securities portfolio. It has also said the inability to access the cash invested in the securities may restrict its business operations.

Carpinello, a partner in the Albany office of law firm Boies, Schiller & Flexner LLP, said the case now will move to discovery, a phase where UBS will have to hand over a lot of documents related to the case.

Source: Fuel Cell Today