Swiss bank UBS was hit with a $51.09 million fine by a Hong Kong watchdog for overcharging up to 5,000 clients for nearly a decade, Reuters reported on Monday (Nov. 11).
The Hong Kong Securities and Futures Commission (SFC) told Reuters in a statement that an investigation revealed that UBS had fleeced customers on “post-trade spread increases and charges in excess of standard disclosures and rates” from 2008 to 2017.
The probe revealed “serious systemic internal control failures” at USB, the SFC said, and affected 5,000 Hong Kong accounts in about 28,700 transactions. UBS also did not disclose conflicts of interest and overcharged some people in “opaque trades.”
The watchdog indicated that the over-charging took place in USB’s wealth management division. The SFC also said in the statement that UBS falsified some records to “conceal the overcharges.”
The USB fine is the biggest to date that was levied on a bank in Hong Kong. In 2017, HSBC’s private banking unit was fined $HK400 million over the sale of Lehman Brothers.
UBS maintains that it “self-reported” issues to the SFC.
“The relevant conduct predominantly relates to limit orders of certain debt securities and structured note transactions, which account for a very small percentage of the bank’s order processing system,” the bank said in a statement to Reuters.
SFC chief executive Ashley Alder said while each “overcharge represented a fraction of each trade” the bank’s “misconduct involved decisions and a pervasive abuse of trust resulting in significant additional revenue for UBS to which it was not entitled.”
In other USB news, USB’s eyeDisk, a flash drive that claimed to be unhackable, was hacked in May by a U.K.-based cybersecurity firm called Pen Test Partners.
The device raised upwards of $21,000 in a Kickstarter campaign, and the company behind it began sending out the devices in March.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More