The hedge fund, Pursuit Partners, claimed that UBS sold it toxic debt securities when it had inside information they were about to be downgraded by major credit rating agencies.

The fund lost its entire $35 million investment in these securities shortly after it purchased them.

Every day, brokers separate clients from their money by stock picking, market timing and mutual fund manager selection. These activities subtract value and reduce returns.

Actively misleading clients is another level of mendacity. UBS previously confined these activities to its retail clients. Now it appears not even its colleagues in the securities industry are immune.

The Court noted that internal memos produced by UBS referred to these securities as "crap" and "vomit."

UBS employs more than 70,000 people and has more than 8,000 financial advisors. In has a long history of participating in wrongful conduct.

In February, 2009, it paid $780 million to avoid a criminal indictment for helping Americans send their assets abroad to avoid paying taxes in the U.S.

In August, 2008, it agreed to repurchase $8.3 billion of auction-rate securities it sold to retail customers. It was accused of making false statements about the liquidity of these investments.

In April, 2003 it contributed $80 million to a global settlement of claims that its analysts defrauded retail investors.

This latest UBS case, even though it involves institutional investors, is more evidence that brokers sometimes eat their own clients. Don't be their next meal!

Dan Solin is the author of the newly published book, The Smartest Retirement Book You'll Ever Read (Perigee Books 2009). His prior books include the New York Times bestsellers, The Smartest Investment Book You'll Ever Read and The Smartest 401(k) Book You'll Ever Read. See SmartestInvestmentBook.com.