Español Inner
Published on:

SEC Fines UBS Over Sales of Reverse Convertible Notes


The U.S. Securities and Exchange Comission (SEC) has reached an agreement with UBS under which UBS will pay more than $15 million to settle claims arising out of its sale of hundreds of millions of dollars of reverse converible notes to customers.

Wastebasket Filled with Crumpled 00 Dollar Bills

According to the SEC, UBS sold about $548 million dollars of “reverse convertible notes” between 2011 and 2014 to more than 8,700 unsophisticated and relatively inexperienced customers. The SEC charges that the reverse convertible notes were sold to many customers for whom there were unsutiable, including retirees.

To settle the SEC’s claims, UBS has reportedly agreed to pay a $6 million civil fine, $8.23 million in disgorvement of its gains, and nearly $800,000 in interest, bringing the total payment to $15 million.

When a broker recommends that a client purchase or sell a security, the broker must have a reasonable basis for believing that the recommendation is suitable for the investor.  Recommendations of reverse convertible note  investments could be unsuitable if made to investors for whom the notes posed an inappropriate risk.

If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options.  Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or for a no-cost, confidential consultation.

Contact Information