FINRA Censures and Fines UBS $500,000 for Failing to Disclose Broker Issues to Regulators

FINRA fined UBS Wealth Management's UBS Financial Services, Inc. $500,000, censuring the firm for failing to report liens or civil judgments for up to 100 brokers from 2010 through 2013.

FINRA AWC #2013037118101

According to FINRA, UBS' failure to report the judgments resulted from supervisory deficiencies. For instance, UBS allegedly failed to adequately review employee wage garnishment orders, meaning that those unsatisfied liens or judgments associated with the wage garnishments were not reported to compliance or supervisory personnel.

Furthermore, the firm purportedly did not have adequate systems in place to review whether employees' responses to annual compliance certifications were true or not. The report states that not being able to factcheck a broker's response to the compliance question of "are you the subject of financial difficulties such as liens?" led to at least 22 brokers answering "no" when they in fact were the subject of liens or judgments.

Accuracy in reporting judgments and liens is required by FINRA/NASD conduct rules. Brokers in debt or financial trouble have a personal interest in selling high commission products or to engage in churning. For example, FINRA barred broker Robert Edward Lee, Jr. for misrepresenting investments to clients and, according to nine disputes and complaints, engaging in churning, unauthorized trading and unsuitable recommendations related to penny stocks. Lee's BrokerCheck shows several outstanding judgments and liens.

If you have invested with a UBS broker, financial adviser or other financial professional whose failure to disclose an active lien or civil judgment has provided incentive to engage in fraudulent activity such as churning, misrepresentation or unauthorized trading that has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

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