UBS to pay more than $ 10 million to resolve SEC charges

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WASHINGTON – A unit of UBS has agreed to pay more than $ 10 million to resolve the charges, it has bypassed priority given to retail investors in some municipal bond offerings, the U.S. Securities and Exchange Commission said on Monday.

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Over a four-year period, UBS Financial Services Inc inappropriately assigned retail client bonds to parties known in the industry as “pinball machines”, who immediately resold the bonds to other brokers with profit, the agency said in a statement.

According to the SEC, UBS registered representatives have facilitated more than 2,000 transactions with these fins, allowing the company to obtain bonds for its own inventory and falsely get a higher priority in the process. assignment of obligations.

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The regulator also settled a case with registered UBS representatives William S. Costas and John J. Marvin, claiming that they had “negligently” submitted retail bond orders on behalf of pinball customers. Costas also helped UBS traders unduly secure bonds for the company’s own inventory via the fins, the SEC said.

Costas agreed to pay restitution and interest totaling $ 16,585 and a civil fine of $ 25,000. Marvin agreed to pay a refund and interest of $ 27,966 and a civil fine of $ 25,000, the SEC said.

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“Retail order periods are meant to prioritize retail investor access to municipal bonds and we will continue to pursue violations that undermine this priority,” said LeeAnn G. Gaunt, Head of the Abuse Unit. Finance Department of the SEC’s Enforcement Division.

UBS and the two representatives have neither admitted nor denied the agency’s findings, the SEC said. A spokesperson for the firm said UBS had fully cooperated with the agency and was happy to resolve the issue.

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