UBS hit with $51M fine for allegedly overcharging clients
UBS Financial Services Senior Portfolio Manager Alan Rechtschaffen on the state of the markets.
A Chinese securities watchdog group has slapped Swiss bank UBS with a $51 million fine for overcharging clients over the course of nine years, officials announced Monday.
UBS must pay HK$400 million – or approximately $51.1 million – for fleecing roughly 5,000 Hong Kong-managed clients out of HK$180 million, or just shy of $23 million U.S. dollars between 2008 and 2017, Hong Kong’s Security and Futures Commission said Monday in a press release.
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In a statement provided to FOX Business, a UBS spokesperson said the bank self-identified and self-reported the issue, at which time the firm also provided a plan to fully reimburse affected clients.
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“The relevant conduct predominantly relates to limit orders of certain debt securities and structured note transactions, which account for a very small percentage of the Bank's order processing system,” the spokesperson further stated. “The behavior of the individuals involved is unacceptable and in strong contrast to the behavioral principles of our firm."
People outside the entrance to an office of the Swiss finance company UBS, located in London, England.
UBS is accused of overcharging clients between 2008 and 2017, “by increasing the spread after execution of trades without their knowledge and charging them fees in excess of standard disclosures or rates,” according to the Statement of Disciplinary Action, which was provided with the press release.
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From 2008 to 2015 UBS’ client advisers and their assistants within the bank’s wealth management division also overcharged customers while trading bonds and structured notes by “increasing the spread charged after the execution of trades without clients’ knowledge,” the release states.
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The advisers allegedly falsified quarterly statements and neglected to disclose full information regarding the executions' prices and charges made to clients, and occasionally misreported the prices.
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The alleged behavior “fell short of the high standards UBS expects of itself to put its clients’ best interests before its own and never let its own interests influence its dealings with its clients,” the disciplinary statement said. "[The conduct] was a dishonest means through which UBS took profits from its clients without agreement with or disclosure to them.”