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Thursday, September 19, 2019

SEC settles with UBS for $15 million after allegations of failing to properly train employees

By Mark Iandolo | Oct 19, 2016

WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) has announced UBS Financial Services will pay $15 million after allegations of failing to adequately educate and train its sales force about its financial products.

“We can now analyze literally hundreds of millions of trading records using sophisticated coding techniques that allow us to build platform wide cases rather than cases built investor by investor," said Andrew Ceresney, director of the SEC Enforcement Division.

"We found UBS dropped the ball by allowing the sales of complex financial products to retail investors without adequately training its sales force.”

According to the SEC, UBS failed to create policies that would properly train its employees who sold reverse convertible notes (RCNs). The employees, therefore, were unable to form a reasonable basis to make suitable recommendations to clients.


“When it comes to complex financial products, investors are especially dependent upon firms making sure their financial advisers comprehend the potential risks and rewards of the investments they are recommending,” said Michael J. Osnato, chief of the SEC Enforcement Division’s complex financial instruments unit. “The SEC takes a dim view of firms that fall short in their obligations.”

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U.S. Securities and Exchange Commission UBS