Former UBS AG executive David Shulman will pay a civil penalty of $2.75 million to settle allegations that he engaged in insider trading of his personal holdings of auction-rate securities, New York Attorney General Andrew Cuomo said.

In a statement, Mr. Cuomo said that Mr. Shulman, the former global head of the Municipal Securities Group at UBS and the head of fixed income for the Americas of UBS Securities LLC, will pay a civil penalty to the state of New York and will be suspended from working for or being associated with a broker-dealer through January 2011.