Defendant Name:
UBS Financial Services Inc.
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
UBS Group AG
SIC Code:
6021
CUSIP:
H4209710
Document Reference:
34-89348
Document Details
Legal Case Name
In the Matter of UBS Financial Services Inc.
Document Name
Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Sections 15(b), 15B(c) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
Document Date
20-Jul-2020
Document Format
Administrative Proceeding
Allegation Type
Municipal Securities & Public Pensions
Document Summary
On July 20, 2020, the SEC instituted settled cease-and-desist proceedings against UBS Financial Services Inc. The SEC stated: "This matter involves UBS Financial Services Inc.'s ("UBS") violation of certain rules of the Municipal Securities Rulemaking Board ("MSRB") and failure reasonably to supervise certain registered representatives and a member of its municipal bond syndicate desk in connection with retail order periods for negotiated new issue municipal bonds. Between August 2012 and June 2016 (the "relevant period"), UBS violated retail order period restrictions in new issue municipal bond offerings it distributed by allocating bonds intended for retail customers to certain customers that were known in the bond industry as "flippers." The Flippers obtained allocations of negotiated new issue bonds from UBS and then immediately resold or "flipped" the bonds to other broker-dealers at a profit. During the relevant period, UBS improperly allocated bonds to the flippers on hundreds of retail orders when those flippers were not eligible for retail priority. In addition, UBS, through certain registered representatives, improperly obtained negotiated new issue bonds for UBS's inventory by placing indications of interest with the flippers who then placed customer orders with the underwriting syndicate, instead of UBS submitting dealer orders directly with the syndicate on its own behalf. This practice circumvented the priority of orders and improperly gave UBS access to a higher priority in the bond allocation process."
Disgorgement & Penalty Information
Resolutions
Cease and Desist Order
Censured
Remedial Acts or Efforts Before the Resolution
Monetary Penalties:
Disgorgement
Individual:
$6,740,000.00
Shared:
Civil Penalty
Individual:
$1,750,000.00
Shared:
Pre-Judgment Interest
Individual:
$1,549,336.00
Shared:
