UBS - UBS to pay $25M to settle SEC charges over strategy marketing

UBS Group ( NYSE: UBS ) agreed to pay ~$25M to settle fraud charges relating to complex investment strategy it called Yield Enhancement Strategy, or YES, the U.S. Securities and Exchange Commission said on Wednesday.

According to the SEC order, UBS ( UBS ) marketed and sold YES to about 500 investors through its platform of domestic financial advisors from February 2016 through February 2017. The order found that UBS didn't provide the advisors with adequate training and oversight on the strategy, and "although UBS recognized and documented the possibility of significant risk in YES investments, it failed to share this data with advisors or clients."

As a result, some of the advisors didn't understand the risks and weren't able to form a reasonable belief that the advice they provided was in the best interest of their clients, according to the order.

UBS ( UBS ) consented to the SEC's order finding it violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. Without admitting or denying the SEC's findings, UBS agreed to pay disgorgement of $5.8M, prejudgment interest of $1.4M, which is deemed satisfied by payments made to investors in related arbitration proceedings. The company also paid a civil penalty of $17.4M.

In May, Allianz SE ( OTCPK:ALIZF ) agreed to pay $1B to settle SEC charges over an options strategy

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