SEC penalizes UBS $3.5 million for overcharging on funds

Firm settles charges that it failed to provide less expensive share classes

Oct 30, 2017 @ 1:57 pm

By InvestmentNews

UBS Financial Services Inc. has agreed to a cease-and-desist order, a censure and a civil penalty of $3.5 million in connection with charges that it failed to provide certain clients with the lowest-cost fund choices to which they were entitled.

According to the Securities and Exchange Commission, approximately 15,250 customer accounts at UBS paid a total of $18.5 million in up-front sales charges, contingent deferred sales charges, and higher ongoing fees and expenses as a result of the firm recommending and selling customers more expensive mutual fund share classes, when less expensive share classes were available. This took place from at least January 2010 through June 2015, the SEC said.

UBS has issued payments, including interest, to these customers, and has converted eligible customers to the mutual fund share class with the lowest expenses for which they are eligible, at no cost to the customers, according to an administrative proceeding release by the SEC.

UBS also said it would undertake additional efforts to locate approximately 970 customers who either have not yet cashed or deposited their payments, or who have changed addresses.


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