UBS Receives HK$400m Fine for Overcharging Clients Over Prolonged Period
12 November 2019: Hong Kong’s Securities and Futures Commission (SFC) has issued UBS with a HK$400 million fine after it was found to have been overcharging its clients for a ten-year period.
An SFC investigation found that, between 2008 and 2015, UBS client advisors and their assistants had overcharged clients when conducting bond and structured note trades by increasing the amount charged after the execution of trades, without the clients’ knowledge. Further, UBS had charged its clients with fees that were in excess of its standard disclosures or rates. In some instances, UBS staff would falsify account statements issued to intermediaries in a bid to conceal the overcharges that had been applied.
The SFC determined that UBS had fostered “serious systemic internal control failures” and had failed to observe the fundamental and overarching duty to act in its clients best interests. Moreover, SFC found a “inadequate policies, procedures and system controls, lack of staff training and supervisions, and failures of the first and second lines of defence functions”. It had abused the trust of its clients.
UBS is taking steps to compensate its clients by repaying the overpayments made, along with associated interest. The total amount to be repaid is around HK$200m.