FINRA Fines UBS $1.5 Million for Sale of Exchange Traded Funds

FINRA Fines UBS $1.5 Million for Sale of Exchange Traded Funds

FINRA Fines UBS $1.5 Million for Sale of Exchange Traded Funds 150 150 Robert H. Rex

May 1, 2012, FINRA fined UBS $1.5 million, censured the firm
and ordered restitution of $431,488 to customers for selling leveraged
and inverse exchange-traded funds (non-traditional ETFs) “without
reasonable supervision”.

The letter of acceptance waiver and consent between FINRA and UBS contains the following findings:

  • UBS consented to a fine of $2.5 million and restitution of $8.25 million in August 2011 for supervisory issues related to the sale of Lehman Brothers Principal Protected Notes
  • In June 2009, they were fined $100,000 relating to the sale of unsuitable short-term sales of closed end funds
  • From January 2008
    to June 2009 the company failed to maintain a supervisory system in
    connection with the sale of non-traditional ETF’s
  • Certain UBS brokers did not have an adequate understanding of
    non-traditional ETFs before recommending these products to customers
  • Certain UBS brokers made unsuitable recommendations of non-traditional ETFs to conservative investors
  • During the time frame examined by FINRA UBS customers bought and sold over $4.5 billion of non-traditional ETFs
  • Certain
    customers with conservative investment objectives and/or risk tolerance
    profiles held non-traditional ETFs for several months including a 64
    year old conservative customer with a $290,000 net worth who lost 43% of his investment in an ETF

If you are a
conservative investor who has suffered losses on ETFs purchased from UBS or any other brokerage firm, you may be able to recover those losses. Please contact our
office to discuss your legal rights. Nationwide representation. Free
consultation. 561 391 1900.


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