Swiss bank UBS to settle US charges over volatility-tied compliance failures
Swiss bank UBS’s brokerage branch is set to dish out $8m to settle charges made by the US’ securities regulator over compliance failures.
The compliance issues related to the sales of a volatility-linked, exchange-traded product, the regulator confirmed today.
The Swiss bank was charged by the US Securities and Exchange Commission (SEC) for failing to restrict its advisors from selling a complex product for two years, starting in January 2016.
The civil penalty will be distributed to harmed investors, the SEC said.
The SEC added some financial advisors did not properly understand the product’s uses and therefore bought the products and held them in client accounts for lengthy periods which resulted in “meaningful losses”.
A spokesperson for UBS said the firm was “pleased to have resolved 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.
UBS has agreed to pay a further $112,274 in interest.
Chief of the SEC enforcement division’s complex financial products unit, Daniel Michael, said: “Advisory firms must protect clients from inappropriate investments in complex financial products
“We will continue to scrutinize firms’ policies and procedures related to these risky products.”