UBS fined $10M in US over bond rule violations

Tuesday, 21. July 2020 00:11

United States Securities and Exchange Commission (SEC) announced on Monday that UBS Group AG's unit UBS Financial Services Inc. agreed to pay a $10 million fine over its alleged involvement in violations concerning municipal bond offerings.

UBS's unit has been accused that it "improperly allocated bonds intended for retail customers to parties known in the industry as 'flippers,' who then immediately resold or 'flipped' the bonds to other broker-dealers at a profit,' the SEC said in a press release, adding that the company's registered representatives have or should have been informed "that flippers were not eligible for retail priority."

Over a four year period, the representatives reportedly "facilitated over 2,000 trades with flippers," acquiring bonds and increasing UBS's bond inventory. By doing that, UBS circumvented "the priority of orders set by the issuers" and breached regulations of the bond allocation process, the agency specified.

Related Links: UBS Group AG
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