(Reuters) - A unit of UBS AG UBSN.VX will pay nearly $4.6 million to settle allegations by multiple state securities regulators that unregistered sales assistants accepted clients’ orders to buy and sell securities, New Jersey’s highest law enforcement agency announced.
U.S.-based UBS Financial Services Inc also did not properly supervise its sales assistants, known to the firm as “client services associates,” according to a news release by New Jersey Acting Attorney General John J. Hoffman.
“UBS is pleased to have resolved this legacy registration issue which involved unsolicited orders,” a UBS spokesman said in a statement. The firm neither admitted nor denied the regulators’ findings, according to a consent order dated August 20.
Sales assistants can be of vital importance to boosting brokers’ incomes. Their responsibilities often extend far beyond clerical work, covering everything from putting through orders to opening accounts. That typically leaves brokers more time to develop client relationships, say securities industry professionals.
The settlement is the result of a multi-state investigation launched by regulators in 2010. The problem, which occurred between 2004 and 2010, stemmed from a flaw in UBS’ system allowing unregistered assistants to enter client orders, according to the consent order.
UBS employed about 2800 sales assistants per year during the period, according to the consent order. The firm requires them to become properly registered in states where they do business. The multi-state investigation, however, revealed that the sales assistants were not always properly registered.
The $4.6 million settlement pool will be shared by the 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
Reporting by Suzanne Barlyn; Editing by Bernard Orr