Defendant Name: UBS Financial Services Inc.

Defendant Type: Subsidiary of Public Company

Document Reference: 2020-159

Document Details

Legal Case Name In the Matter of UBS Financial Services Inc.
Document Name UBS to Pay $10 Million for Violating Rules Which Give Priority to Retail Investors in Municipal Offerings
Document Date 20-Jul-2020
Document Format Administrative Proceeding
File Number 3-19886
Allegation Type Municipal Securities & Public Pensions
Document Summary The SEC stated that: "UBS Financial Services Inc. has agreed to pay more than $10 million to resolve charges that it circumvented the priority given to retail investors in certain municipal bond offerings."

Disgorgement & Penalty Information

Resolutions
Cease and Desist Order
Censured
Monetary Penalties:

Disgorgement

Individual:     $6,740,000.00 Shared:    

Civil Penalty

Individual:     $1,750,000.00 Shared:    

Pre-Judgment Interest

Individual:     $1,500,000.00 Shared:    

Related Documents:

34-89348 20-Jul-2020 Administrative Proceeding
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
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."

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