UBS Settles Claims That Sales Reps Weren't Properly Trained
September 28 2016 - 1:30PM
Dow Jones News
UBS Group AG agreed to pay more than $15 million to settle
Securities and Exchange Commission accusations that the Swiss
bank's U.S. unit failed to adequately train sales representatives
about the risks of certain complex financial products that were
sold to individual investors.
According to the SEC, UBS Financial Services sold roughly $548
million of the financial products, known as single-stock linked
reverse convertible notes, to more than 8,700 relatively
inexperienced individual investors from 2011 through 2014. The SEC
alleged that some of UBS's sales representatives weren't provided
adequate education and training to understand the risks of the
financial products, which contained embedded derivatives, and as a
result they weren't always able to determine whether they were a
good match for certain customers.
UBS agreed to the SEC order without admitting or denying the
findings. A UBS spokesman said the company is pleased to have
resolved the matter.
According to the SEC order, some UBS representatives made
unsuitable recommendations to certain customers who had indicated
primarily moderate or conservative investment objectives, along
with modest reported incomes and net worths, including some that
were retired.
In all, UBS unit sold more than $19.6 billion of structured
notes during the period, the majority of which were reverse
convertible notes, the SEC stated.
The settlement includes a civil penalty of $6 million and
disgorgement of $8.2 million.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
September 28, 2016 13:15 ET (17:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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