RPT-WRAPUP 2-UBS to buy back stricken debt securities

* UBS to buy back bonds for $19.4 billion

* UBS to pay $150 million in fines

* UBS shares were up 1.2 percent in New York trading

(Adds comments from New York attorney general, UBS)

By Jason Szep

BOSTON (Reuters) - Swiss bank UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) agreed on Friday to buy back $19.4 billion of debt securities whose value collapsed during the global financial crisis and to pay $150 million to settle charges it misled investors.

The settlement with Massachusetts, New York and federal regulators came a day after Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) announced they would buy back almost $20 billion of the so-called auction-rate securities between them.

UBS and other banks had marketed the securities as safe and liquid as cash, but those who bought them have been unable to access their money since the $330 billion market collapsed in February, freezing the assets, as the credit crunch worsened.

Signaling a possible deepening in the legal fallout, the Bank of New York Mellon Corp (BK.N: Quote, Profile, Research, Stock Buzz) said one of its units was under investigation by U.S. regulators over the securities.  Continued...