It is being reported that UBS AG will pay $26.6 million to resolve U.S. regulatory claims its Puerto Rico-based brokerage unit sold shares in mutual funds without disclosing that it was propping up the price of the funds in the secondary market.
Apparently, UBS Puerto Rico agreed to settle the SEC's charges, without admitting or denying the findings.
The SEC had alleged that UBS Financial Services Inc. of Puerto Rico, starting in 2008, solicited thousands of retail investors, saying a competitive and liquid secondary market contributed to their closed-end mutual funds' performance.
The charges further alleged that when investor demand declined, the brokerage sought to maintain the illusion of a liquid market by buying shares into its own inventory from customers who wished to exit the market. The unit later sold 75 percent of its closed-end fund inventory to unsuspecting investors, withdrawing its market price and liquidity support.
The $26.6 million sanction will be placed into a fund for harmed investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Apparently, UBS Puerto Rico agreed to settle the SEC's charges, without admitting or denying the findings.
The SEC had alleged that UBS Financial Services Inc. of Puerto Rico, starting in 2008, solicited thousands of retail investors, saying a competitive and liquid secondary market contributed to their closed-end mutual funds' performance.
The charges further alleged that when investor demand declined, the brokerage sought to maintain the illusion of a liquid market by buying shares into its own inventory from customers who wished to exit the market. The unit later sold 75 percent of its closed-end fund inventory to unsuspecting investors, withdrawing its market price and liquidity support.
The $26.6 million sanction will be placed into a fund for harmed investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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