SEC Fines UBS Financial Services $15 Million

POMPANO BEACH, Fla. - Nov. 29, 2016 - PRLog -- The Securities and Exchange Commission (SEC) recently fined UBS Financial Services for more than $15 million to settle charges that it failed to 'adequately educate and train its sales force about critical aspects of certain complex financial products it sold to retail investors.'

The SEC's order found that UBS failed to develop and implement policies and procedures designed to educate and train UBS registered representatives in connection with the sale of reverse convertible notes (RCNs) so that they could form a reasonable basis to make suitable recommendations.

The SEC states that RCNs are complex securities that feature embedded derivatives whose performance is driven by the concept of implied volatility.  Without the adequate education and training, certain registered representatives made unsuitable recommendations in the sale of RCNs to certain retail clients knowing their investment profiles.  UBS sold approximately $548 million in RCNs to more than 8,700 inexperienced retail clients.

RCNs come in many varieties, but a common type of reverse convertible note is a 'fixed term unsecured debt obligation.'   This product is linked to the performance of a single underlying stock. In exchange for the heightened income payments and limited downside protection, investors are exposed to the significant and often undisclosed risk that they will not receive their full principal upon maturity, depending on the price of the underlying stock. These notes were sold under a variety of different names, including but not limited to:

Airbag Autocallable Yield Optimization Notes

UBS Trigger PAOS liked to Cree stock

Airbag Yield Optimization Securities

UBS Trigger PAOS linked to US Steel stock

Trigger Autocall Optimization Securities

UBS Trigger PAOS linked to Peabody Energy stock

Trigger Phoenix Autocall Optimization Securities

If you've suffered devastating losses through UBS of Puerto Rico or UBS in the United States, please call Soreide Law Group (888) 760-6552 for a free consultation on how you may be able to recover your losses.  Soreide Law Group is currently representing investors nationally and internationally against UBS.

Securities Lawyer, Lars Soreide, of Soreide Law Group has been quoted in several national publications regarding the lawsuits he has filed against UBS on behalf of his clients.  Please visit our website and view these articles: http://www.securitieslawyer.com.