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UBS Fined HK$400 Mln By Hong Kong For Overcharging Clients Over A Decade

The Hong Kong Securities and Futures Commission or SFC fined UBS AG (UBS) HK$400 million for overcharging its clients over a ten-year period and for related serious systemic internal control failures.

The overcharging affected about 5,000 Hong Kong-managed client accounts in about 28,700 transactions, the Hong Kong regulator said in a statement.

The regulator said that UBS also agreed to repay the affected clients about HK$200 million. The repayment covers overcharges made through post-trade spread increases and charges in excess of standard disclosures or rates between 2008 and 2017.

The SFC said that UBS not only failed to observe the fundamental and overarching duty to act in its clients' best interests but also abused the trust of unsuspecting clients by failing to disclose conflicts of interest and overcharging them in opaque trades.

The SFC's investigations revealed that between 2008 and 2015, the client advisors (CAs) and client advisors' assistants (CAAs) in UBS's Wealth Management division had overcharged clients when conducting bond and structured note trades by increasing the spread charged after the execution of trades without clients' knowledge; and between 2008 and 2017, UBS had also charged its clients fees in excess of its standard disclosures or rates.

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