UBS to return $35 million to Massachusetts towns

BOSTON (Reuters) - Swiss bank UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) will return more than $35 million to Massachusetts cities and towns after the money was put into prohibited investments, the state's attorney general said on Wednesday.

Attorney General Martha Coakley's office had been probing allegations that UBS misled Massachusetts officials over whether state law allowed them to invest in auction rate securities.

(Reporting by Svea Herbst-Bayliss; editing by John Wallace)