25.11.2019. Hong Kong regulator charged UBS for overcharging wealth clients

Company News

Hong Kong’s regulator has slapped a US$51m fine on UBS for overcharging thousands of global wealth management clients for nearly a decade in a case that exposed serious and systematic problems with the bank’s internal controls.
The Hong Kong Securities and Futures Commission (SFC) found that UBS systematically overcharged private banking clients by manipulating the price on bond and structured product trades between 2008 to 2015.
Hong Kong clients of UBS’s wealth management division were forced to pay more for bonds and structured debt products after the bank added a further “spread” to the trades that clients in its flagship wealth management business had requested.
UBS also charged some clients too much in fees between 2008 and 2017.
The Swiss bank has agreed to offer a compensation of HK$200mn to customers affected by its conduct.
These 5,000 Hong Kong clients were involved in 28,700 such transactions.
A lack of supervision of staff and “failures of the first and second lines of defence functions” of UBS contributed to the conduct, the regulator said its investigation had found.
The Swiss bank also took two years to report the misconduct after discovering it.