The US woes of Swiss bank UBS continued unabated because of developments in legal cases involving the bank, according to various media reports.

Meanwhile, its shares fell yesterday due to worries about further debt write-downs in the second quarter.

On the legal front, denials by UBS that it pushed investors to buying auction-rate securities that subsequently proved to be poor investments have unravelled, according to the New York Times.

Massachusetts regulators have obtained a slew of damning e-mails sent by the Zurich-listed bank’s top executives, the newspaper said. In August last year, corporations began to dump their auction-rate securities as the credit markets froze, leaving UBS to find new buyers so that it would not get stuck with the securities on its books.

“As you can imagine during these stressful times, the pressure is on to move our inventory,” wrote David Shulman, global head of fixed income distribution at UBS, on 30 August. “I am aware that JPM and Citi are on all 'alert’ in the same fashion with their retail groups,” the NYT quoted him as saying.

This email was released as part of a civil suit brought against UBS by William Galvin, secretary of the Commonwealth of Massachusetts. He alleges that UBS misled investors by saying that auction-rate securities were as safe as cash in order to keep these arcane bonds off their own books.

A UBS spokeswoman told the NYT that the bank would defend itself against the allegations.

In the separate legal case involving a former UBS banker, the US Justice Department has asked a federal court in Miami for an order authorising the Internal Revenue Service to request information from UBS about US taxpayers who may be using Swiss bank accounts to evade federal income taxes.

Earlier this month, news services reported that federal investigators wanted to travel to Switzerland to carry out part of their investigation into the case and were seeking information about the bank's clients.

The US Justice Department seeks permission to allow the IRS to serve what is known as a "John Doe" summons on the bank. The summons is used to obtain information about possible tax fraud by people whose identities are unknown.

On 19 June, former UBS banker Bradley Birkenfeld pleaded guilty in a Florida federal court to conspiring to defraud the IRS by assisting UBS clients in avoiding US reporting requirements on income in Swiss bank accounts.

According to Birkenfeld's court statement, UBS employees assisted wealthy US clients in concealing their ownership of assets held offshore by creating sham entities and then filing IRS forms falsely claiming the entities owned the accounts.

If approved by the court, the summons will direct UBS to produce records identifying US taxpayers with accounts in Switzerland who elected to have their accounts remain hidden from the IRS.

The bank’s shares fell yesterday after weekend media reports suggested that the bank would report further billions in asset write-downs and losses for the second quarter and that clients within the wealth management unit were withdrawing funds at an alarming rate.

UBS has already written down over $37 billion since the onset of the subprime crisis last year.