The Securities and Exchange Commission (SEC) has ordered UBS Financial Services to pay over $15 million for their sales of reverse convertible notes. The SEC filed a regulatory action against UBS, alleging that the firm failed to reasonably supervise its representatives’ sales of reverse convertible notes to customers. The regulatory action stated that, between 2011 and 2014, UBS sold approximately $10.7 worth of reverse convertible notes and that it failed to adequately educate and train its representatives regarding the risks and characteristics of reverse convertibles, and that led to some unsuitable investment recommendations to customers. To settle these allegations, UBS agreed to disgorge $8,227,566 and prejudgment interest of $798,316, as well as a $6,000,000 civil penalty.
Brokerage firms such as UBS have a responsibility to adequately supervise all representatives who are registered through their firm. Firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. If firms fail to adequately supervise their registered representatives, they may be liable for investment losses. Stoltmann Law Offices specializes in recovering money for investors in the Financial Industry Regulatory Authority (FINRA) arbitration forum. We take cases on a contingency fee basis and may be able to help you take legal action against UBS if you’ve sustained losses.
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