© Reuters. FILE PHOTO: Label of Swiss monetary institution UBS is considered in Basel
WASHINGTON (Reuters) – A unit of UBS has agreed to pay bigger than $10 million to ranking to the bottom of bills it circumvented the precedence given to retail investors in positive municipal bond offerings, the U.S. Securities and Swap Commission mentioned on Monday.
Over a four-365 days duration, UBS Financial Products and services Inc improperly allocated bonds intended for retail potentialities to events identified within the alternate as “flippers,” who straight away resold the bonds to other dealer-sellers at a income, the agency mentioned in an announcement.
UBS registered representatives facilitated bigger than 2,000 trades with such flippers, allowing the agency to make bonds for its have confidence inventory and improperly make a increased precedence within the bond allocation process, in accordance with the SEC.
The regulator also settled court docket cases with UBS registered representatives William S. Costas and John J. Marvin, discovering that they’d “negligently” submitted retail orders for bonds on behalf of flipper potentialities. Costas also helped UBS traders improperly make bonds for the agency’s have confidence inventory by design of the flippers, the SEC mentioned.
Costas agreed to pay disgorgement and interest totaling $16,585 and a civil penalty of $25,000. Marvin agreed to pay disgorgement and interest of $27,966 and a civil penalty of $25,000, the SEC mentioned.
“Retail dispute sessions are intended to prioritize retail investors’ ranking admission to to municipal bonds and we can continue to pursue violations that undermine this precedence,” mentioned LeeAnn G. Gaunt, chief of the SEC Division of Enforcement’s Public Finance Abuse Unit.
UBS and the 2 representatives did no longer admit or sigh the agency’s findings, the SEC mentioned. A spokeswoman for the agency mentioned UBS had absolutely cooperated with the agency and used to be contented to ranking to the bottom of the topic.
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