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