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June 29, 2022 at 08:18 PM
UBS Group AG agreed to pay the U.S. Securities and Exchange Commission $25 million in penalties to settle allegations that some its advisers recommended a complex investment strategy involving options that may not have been in their clients’ best interest.
UBS investment advisors marketed and sold YES, or Yield Enhancement Strategy, for about a year starting in February 2016 even though some didn’t understand the risks themselves, according to the SEC.
The Swiss firm’s UBS Financial Services Inc. unit failed to provide adequate training and when investors lost money both money managers and clients said they were surprised.
The firm, which didn’t admit or deny wrongdoing, agreed to pay a $17.4 million penalty plus more than $7 million in disgorgement and interest. “UBS is pleased to have amicably resolved this matter,” it said in a statement. “UBS appreciates the SEC’s acknowledgment that in early 2017, UBS voluntarily remediated the issue by enhancing its risk control framework and strengthening its training program for the strategy.”
