UBS Group Fined $51M By Hong Kong Securities Regulator
The Hong Kong Securities and Futures Commission (SFC) is ordering UBS Group AG (UBS) to pay a $51M fine for overcharging clients between 2008 and 2017. It is also ordering the Swiss banking giant to pay more than $25M in compensation to customers that were harmed.
According to the Hong Kong regulator, about 5,000 clients paid more than they should have in approximately 28,700 transactions. This happened after UBS advisors and assistants added padding to spreads involving bonds, as well as structured note trades and charging extra fees. UBS Group is accused of not disclosing to clients that they were paying these fees.
The SFC says that these overcharges went beyond the caps allowed by contract for excess fees and when these impacted client trades were put through, it was the bank that profited. The Hong Kong securities regulator accused UBS of falsifying quarterly statements to hide these overcharges.
It is also accusing the bank of not acting in clients’ interests. The overcharging occurred over at least seven years, and it took another two years for UBS to finally disclose the misconduct.
UBS Group says that all employees and firm agents involved in these overcharges have been let go from the bank and that over 20 staffers were disciplined for misconduct. It was just in March that the SFC charged UBS almost $48M for not sponsoring or leading public market floats.
UBS Accused Of Puerto Rico Bond Fraud
Over the past six years, in a different part of the world, UBS Group and UBS Puerto Rico have had to contend with many millions of dollars in fines by regulators, as well as investors arbitration claims and settlements, all over massive losses involving Puerto Rico bond and closed-end bonds.
The investments were sold by the firm and other broker-dealers, even when they were too risky or inappropriate for customers.
UBS, especially, is seen as one of the greatest offenders because the firm pressured its own brokers to push the Puerto Rico investments onto clients despite knowing the risks. It even encouraged many of its customers to take out loans from the bank so they could invest even more in these securities.
When the bonds plunged in value in 2013, many investors including retirees and ‘mom and pop’ businesses, lost everything.
Stock Fraud Attorneys: How Our Team Can Help
At Sheperd Smith Edwards & Kantas, LLP (SSEK Law Firm) we have encountered many investor claim cases including unsuitability, churning and omissions. If you are a victim of the Puerto Rico bond fraud or suspect that you may be due remediation for losses from UBS Group, we can help.
Our UBS investor fraud lawyers work with clients throughout the US in fighting to recoup their losses. Contact us today to speak to one of our investment fraud lawyers and receive a free, no-obligation case consultation.