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UBS fined $54 million for improper trading practices

13th January 2006
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Swiss-based bank UBS has been fined $54 million by the New York Stock Exchange over improper mutual fund trading.

The settlement with the NYSE, the state of New Jersey and the state of Connecticut concerns a trading practice known as market timing involving rapid trading in mutual funds for the benefit of clients � which can harm individual investors. It is not illegal but it is considered improper and sparked complaints to the exchange. UBS has consented to the charge, but has neither confirmed nor denied any wrongdoing.

The NYSE said that beginning January 2000 and continuing through to December 2002, brokers in at least seven UBS branch offices engaged in deceptive market-timing to benefit their customers, typically hedge funds, to the detriment of the affected mutual funds and their non-market timing shareholders.

The exchange also claims that the brokers used multiple customer accounts to hide their identities. According to the NYSE, the bank failed to properly supervise employees or maintain proper records.

UBS will set aside $18 million for potentially affected investors and $16 million for investor education and securities-enforcement initiatives. The bank said that the charges will be reflected as provisions in the firm's fourth quarter results.

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  • Hi all,

    RE: UBS fined $54 million for improper trading practices.

    The figures are outrageous!

    I am sure that the UBS investors w...
    Bukaboo.com, Building Surveyor, London, U.K.
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