UBS Settles Claims That Sales Reps Weren't Properly Trained

UBS Group AG agreed to pay more than $15 million to settle Securities and Exchange Commission accusations that the Swiss bank's U.S. unit failed to adequately train sales representatives about the risks of certain complex financial products that were sold to individual investors.

According to the SEC, UBS Financial Services sold roughly $548 million of the financial products, known as single-stock linked reverse convertible notes, to more than 8,700 relatively inexperienced individual investors from 2011 through 2014. The SEC alleged that some of UBS's sales representatives weren't provided adequate education and training to understand the risks of the financial products, which contained embedded derivatives, and as a result they weren't always able to determine whether they were a good match for certain customers.

UBS agreed to the SEC order without admitting or denying the findings. A UBS spokesman said the company is pleased to have resolved the matter.

According to the SEC order, some UBS representatives made unsuitable recommendations to certain customers who had indicated primarily moderate or conservative investment objectives, along with modest reported incomes and net worths, including some that were retired.

In all, UBS unit sold more than $19.6 billion of structured notes during the period, the majority of which were reverse convertible notes, the SEC stated.

The settlement includes a civil penalty of $6 million and disgorgement of $8.2 million.

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(END) Dow Jones Newswires

September 28, 2016 13:15 ET (17:15 GMT)

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