UBS Fined for Failing to Educate Brokers on Complex Product Sales
From the Desk of Jim Eccleston at Eccleston Law LLC:
The SEC has fined UBS Financial Services over $15 million because of its failure from 2011 to 2014 to educate and train retail brokers on the sale of almost $11 billion of complex structured products.
UBS gave brokers inadequate information on the potential risks to its brokers involving the sale of complex single-stock linked reverse convertible notes (RCNs) to 44,000 customer accounts. Approximately 20% of the customers that were sold the product had modest reported income and net worth and primarily moderate or conservative investment objectives.
Without admitting or denying the facts, UBS agreed to a censure, disgorgement of $9 million in revenue and interest and a $6 million penalty, even though it turned out that most of the approximately 2,500 structured notes sold performed well due to the strength of the stock market.
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Related Attorneys: James J. Eccleston
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