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UBS to Pay $200 Million to Settle SEC Charges

New York (HedgeCo.Net) – UBS AG will pay $200 million to settle the SEC charges that the Swiss Bank acted as an unregistered broker-dealer and investment adviser.

According to the original compliant, UBS helped certain U.S. individuals to set up and maintain undisclosed Swiss bank accounts, which enabled these clients to evade U.S. taxes.  In addition, UBS acted as an unregistered broker-dealer and investment adviser from 1999 to 2008, to thousands of U.S. clients while holding billions of dollars in assets for them.  UBS allegedly raked in profits of up to $140 million a year from this business.  

“UBS avoided compliance with U.S. securities laws for many years, at the same time they were engaged in other illegal conduct, which makes this one of the most egregious cases of its kind," said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement in a recent press release.

The SEC alleges that UBS was fully aware that it was required to register with their agency.  They believed that UBS lured clients by sending them to exclusive events such as art shows, yacht outings and sporting events, all sponsored by the bank.  In addition, client advisors who traveled abroad to the U.S. were given encrypted laptops and were trained on how to avoid detection by authorities.  

In addition to the $200 million fine, UBS will settle criminal charges with the Department of Justice in which they will pay an addition fine of $180 million, and another $400 million in tax-related payments.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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