On May 1, 2012, the Securities & Exchange Commission (SEC) charged UBS Financial Services of Puerto Rico and two executives, Miguel A. Ferrer and Carlos J. Ortiz, with making misleading statements to investors, concealing a liquidity crisis, and masking its control of the secondary market for 23 proprietary closed-end mutual funds.
UBS has agreed to settle the SEC charges by paying $26.6 million that will be placed in a fund for investors.
In the spring of 2009, UBS realized their closed-end fund inventory represented a financial risk. To reduce its inventory, the sold about 75% of their holdings to investors while misrepresenting the manner in which secondary market prices were set as well as the liquidity of the market.
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Rex Securities Law
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