Switzerland’s largest bank gets fined in the US for violation of short-selling regulations.
The Financial Industry Regulatory Authority (FINRA), which regulates US-based brokerages, is fining UBS Securities $2.5 million for violating short-selling regulations over a period of nine years, it said in a statement issued Monday.
Uncovered Positions
FINRA, which is overseen by the Securities Exchange Commission, found that UBS did not close out at least 5,300 positions in a timely enough fashion between 2009 and 2018, routing or executing more than 73,000 security short sales without first borrowing or arranging to borrow the shares. That meant that the regulator's close-out requirements were not satisfied.
System Failure
Although UBS conducted annual reviews of its systems, it failed to identify the improper treatment of shares associated with long-selling activities by clients.
Switzerland's largest bank also failed to detect red flags present in its books and records that should have indicated systems failures that showed certain buy-in orders as limit orders, according to the regulator.
UBS consented to the entry of FINRA’s findings without admitting or denying the charges.
