Friday, 30 January 2015
Last updated 1 hour ago
Oct 26 2011 | 10:55am ET
UBS yesterday agreed to pay $12 million to settle allegations that it failed to supervise short-selling by its own traders as well as its hedge fund clients.
According to the Financial Industry Regulatory Authority, UBS failed to verify that the shorts were not naked—that is, that the hedge funds could actually cover their shorts. It also incorrectly classified some of the trades as long bets.
There were likely "tens of millions" of such improperly-processed short-sales during the period.
UBS did not admit or deny wrongdoing, saying that it was "pleased to have resolved this matter."
FINRA said that UBS failed to update its short-selling compliance system for four years after the self-regulatory organization imposed new rules in 2005. Even then, UBS' "systematic supervisory failure" continued into last year.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…