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Hong Kong regulator fines UBS $51m for overcharging clients

GavelSwiss banking giant UBS has been issued with a reprimand and HK$400 million (US$51 million) fine by Hong Kong’s Securities and Futures Commission (SFC) “for overcharging its clients over a 10-year period and for related systemic internal control failures”. According to the watchdog, the overcharges were made through post-trade spread increases and charges in excess of standard disclosures or rates between 2008 and 2017. Approximately 5,000 Hong Kong-managed client accounts were affected by the overcharge practice. The SFC’s investigation also revealed that UBS did not report the misconduct to the SFC until two years after it had been discovered. “The SFC expects all intermediaries to uphold high standards of integrity when managing trades for clients,” said Ashley Alder, chief executive at the SFC. “UBS fell far short of these expectations by systematically overcharging a very large number of clients over many years,” added Alder. “Although each overcharge represented a fraction of each trade, UBS’s misconduct involved deception and a pervasive abuse of trust resulting in significant additional revenue for UBS to which it was not entitled.”   UBS will compensate the clients by repaying the overcharges alongside interest, the SFC said. ©2019 funds global asia

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