May 2, 2012 Comments (0) Blog, Securities Fraud

UBS AG Fined Over Mutual Fund Sales

(Last Updated On: July 17, 2015)

It is being reported that, UBS AG will pay $26.6 million to resolve U.S. regulatory claims its Puerto Rico-based brokerage unit sold shares in mutual funds without disclosing that it was propping up the price of the funds in the secondary market.

Apparently, UBS Puerto Rico agreed to settle the SEC’s charges, without admitting or denying the findings.

The SEC had alleged that UBS Financial Services Inc. of Puerto Rico, starting in 2008, solicited thousands of retail investors, saying a competitive and liquid secondary market contributed to their closed-end mutual funds’ performance.

The charges further alleged that when investor demand declined, the brokerage sought to maintain the illusion of a liquid market by buying shares into its own inventory from customers who wished to exit the market. The unit later sold 75 percent of its closed-end fund inventory to unsuspecting investors, withdrawing its market price and liquidity support.

The $26.6 million sanction will be placed into a fund for harmed investors.

The foregoing information has been provided by The White Law Group.  The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.

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