UBS, November 10, 2011

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On November 10, 2011, the U.S. Securities and Exchange Commission (SEC) charged global financial-markets giant UBS AG, formerly the Union Bank of Switzerland, for inaccurate reporting related to short sales. UBS agreed to pay $8 million in penalties and hire an independent consultant in order to settle the case.<ref>SEC Charges UBS With Faulty Recordkeeping Related to Short Sales. SEC. Retrieved on November 10, 2011.</ref>

Charges[edit]

The SEC alleged, in the first of securities lending cases to come, that UBS kept inaccurate logs of its short sales.<ref>UBS settles claim on records of short selling. Financial Times. Retrieved on November 10, 2011.</ref> The settlement of the charges follows a $12 million payment to FINRA for related charges.

A "locate" is a term used for a broker-dealer locating a stock for short-selling. Broker-dealers keep records of these locates, and in the case of UBS, the SEC claimed that the company had kept inaccurate locate logs as far back as 2007. The enforcement action, however, does not claim that UBS had initiated short sales without reasonable belief that it could fulfill the order.

Related Documents[edit]

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