Hong Kong's securities regulator has banned UBS from sponsoring initial public offerings in the territory for the next 18 months. The last word hasn't been spoken yet.
UBS and a host of other banks including Standard Chartered are being investigated in Hong Kong over allegations of shoddy work on initial public offerings from 2009 onwards.
On Friday, UBS said it had been suspended this month by the Securities and Futures Commission, or SFC, from sponsoring IPOs for the next 18 months, and fined HK$119 million.
«UBS intends to appeal the decision,» the Swiss bank said in the legal disclosure section of its annual report, which means the suspension won't enter force yet. The SFC wasn't immediately available for comment.
Walking Wounded
The fine is paltry, but the damage to UBS' reputation comes as the bank tries to dramatically beef up its presence in China, as finews.asia reported last year. If UBS cannot pitch IPOs to clients for 18 months, it is hobbled in efforts to win other business from big Chinese firms seeking to tap the capital market.
The sanction stems from a Hong Kong investigation of 136 «active fraud cases», 28 of them particularly serious ones, as finews.asia reported last year. The SFC alleges that the careless work from the 15 unnamed sponsors, as investment banks and securities firms that underwrite listings are called, resulted in billions in investment losses.
