UBS AG will pay $4.58 million to settle an investigation by state regulators into whether its sales assistants were licensed in states where they did business.
UBS's “client service associates” took orders without having the required state registrations, according to a statement Monday by the New Jersey Bureau of Securities, which said it led the case. The Zurich-based bank didn't admit or deny the allegations.
“Over a six-year period, UBS failed to recognize a flaw in its order-entry systems that allowed unregistered persons to accept customer orders,” Abbe R. Tiger, the New Jersey agency's chief, said in the statement.
The multi-state case involved an unknown number of unsolicited trades handled by sales assistants who were not properly licensed in New Jersey and other states.
UBS on average employed 2,277 sales assistants from 2004 through 2010, the period covered by the case, according to the settlement agreement.
The fine will be split among the 50 states, the District of Columbia, Puerto Rico and the Virgin Islands.
Other states, plus the District of Columbia, Puerto Rico and the Virgin Islands, can participate in the settlement, said Bob Webster, spokesman for the North American Securities Administrators Association Inc.
UBS cooperated with the investigation, New Jersey said, and in November 2010 changed its order- entry system to validate employee state-registration status.
“UBS is pleased to have resolved this legacy registration issue which involved unsolicited orders,” Gregg Rosenberg, a UBS spokesman, said in an e-mailed statement.
(Bloomberg News contributed to this story.)