UBS dinged by Virginia after broker recommended gold and precious metals securities

The overconcentration of securities was not suitable for some clients, Virginia alleged

Feb 8, 2019 @ 2:08 pm

By Bruce Kelly

UBS Financial Services Inc. last month agreed to pay Virginia's State Corporation Commission $319,000 to settle charges that a former broker in a branch in Roanoke made unsuitable recommendations of certain gold and precious metals securities to 18 clients, according to the order, which was dated Jan. 28.

Virginia alleged that the sales issue occurred in 2013 and 2014. After it investigated the clients' gold and precious metal purchases, Virginia alleged that the clients held an overconcentration of "said securities when the recommendations were not suitable" for some of the clients, in violation of state securities rules, according to the order.

UBS will offer to pay $289,000 to the 18 clients and $30,000 to Virginia to cover the cost of the investigation.

The order does not identify the former UBS broker involved in the sales of the securities. UBS cooperated in Virginia's investigation and neither admitted nor denied the allegations by the securities division.

A spokesman for UBS, Peter Stack, did not comment when asked about the settlement.

Like many large firms, UBS deals with a steady amount of regulatory issues. For example, at the end of last year, UBS was fined $14.5 million for failing to run anti-money laundering programs reasonably designed to monitor high-risk transactions in customer accounts.


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