Article: UBS will pay $12M over naked shorts

Article - Media, Publications

UBS will pay $12M over naked shorts

dcubberley, 27 October 2011

UBS AG, Switzerland’s biggest bank, will pay $12 million to resolve Financial Industry Regulatory Authority claims that a brokerage unit allowed millions of short-sale orders to be placed without reasonable grounds to believe that the securities could be delivered. Continue reading “Article: UBS will pay $12M over naked shorts”

Article: UBS fined in U.S. over improper short sales

Article - Media, Publications

UBS fined in U.S. over improper short sales

Jonathan Stempel, 25 October 2011

In the largest penalty of its type, Swiss bank UBS AG was fined $12 million by a U.S. brokerage regulator over its “systemic” failure to properly handle millions of short-sale orders.

The Financial Industry Regulatory Authority said violations by the bank’s UBS Securities LLC broker-dealer unit caused the orders to be mismarked or filled without reasonable grounds to believe the underlying securities could be located.

In short sales, investors sell securities they do not own, hoping the prices will fall so they can repurchase the securities later at the lower price, repay the lender and pocket the difference as profit. Regulators fear that abuses can distort markets, and accelerate declines in share prices. Continue reading “Article: UBS fined in U.S. over improper short sales”