UBS brokerage pays $ 8 million to settle US SEC fees, SEC says

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WASHINGTON, July 19 (Reuters) – The brokerage arm of UBS Group AG (UBSG.S) has agreed to pay $ 8 million to settle fees imposed by the U.S. securities regulator for compliance breaches on the sale of a product, the regulator said on Monday.

The United States Securities and Exchange Commission (SEC) accused UBS of failing to prevent its advisers from selling a complex product, which was not suitable for prolonged holding, for two years from January 2016.

The settlement is the sixth enforcement measure stemming from an agency initiative targeting sales by investment advisers of certain exchange-traded products to retail investors.

The SEC said some financial advisers had a misunderstanding of the proper use of such a product, buying and holding the product in clients’ accounts for long periods of time resulting in “significant losses.”

A spokesperson for UBS, who has neither denied nor admitted the SEC allegations, said the company was “happy to have solved this matter.”

“As the SEC acknowledged, UBS proactively reviewed and removed the product from its program before being contacted by the SEC,” the spokesperson said in an emailed statement.

UBS has agreed to pay an additional $ 112,274 in interest. The civil sanction will be distributed to aggrieved investors, the SEC said.

“Consulting firms must protect their clients from inappropriate investments in complex financial products,” said Daniel Michael, head of the complex financial products unit of the SEC’s enforcement division.

“We will continue to carefully review the policies and procedures of companies related to these risky products,” he said.

Reporting by Chris Prentice and Lisa Lambert in Washington; Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.


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