According to a recent Administrative Proceeding with the Securities and Exchange Commission (SEC), UBS had supervision failures. Allegedly, from 2011 until 2014, UBS failed to reasonably supervise its personnel with a view toward preventing violations of the federal securities laws. Its Structured Solutions Desk failed to develop and implement policies and procedures reasonably designed to educate and train UBS registered representatives in connection with the Structured Solutions Desk’s single stock-linked reverse convertible notes (RCNs). The Desk structured approximately 2,500 different RCNs based upon 425 different underlying stocks. These contained embedded derivatives. A single-stock RCN is a type of structured product issued by a financial institution as an unsecured debt obligation that is linked to the performance of an underlying single stock. UBS sold almost $10.7 billion of notional RCNs to 44,000 customer accounts during the relevant period. Many of these customers were modest investors who had little or no investing experience and many were retired. These investments were not suitable for these. The Desk selected stocks that had implied volatility, or the market’s assessment of the risk and expected future volatility, or uncertainty regarding the magnitude of changes in the market value of a stock determined by observing the prices of options on that stock in the listed options market. These stocks were not suitable for the investors and the brokers who sold them did not take into account the fact that many of the customers were elderly and were not suited for these investments. Please call our securities law offices today if you suffered losses with UBS. We may be able to help you bring a claim against the firm on a contingency fee basis.
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