The Securities and Exchange Commission said Wednesday UBS Financial Services (UBS) will pay more than $15 million to settle charges that it failed to adequately educate and train advisors about reverse convertible notes, of which some $548 million were sold to over 8,700 "relatively inexperienced" investors.
According to the SEC's order, UBS failed to "develop and implement policies and procedures reasonably designed to educate and train UBS registered representatives in connection with the sale of reverse convertible notes (RCNs) so that they could form a reasonable basis to make suitable recommendations.
HSBC Holdings (LSE: HSBA) has issued reverse convertible notes
in two offerings.
Some of the more significant cases involved the sale of collateralized mortgage obligations (five cases, $760,000 in total fines), closed-end funds (three cases, $1 million in total fines), and reverse convertible notes
(two cases, $710,000 in total fines).
WASHINGTON -- The Financial Industry Regulatory Authority (FINRA) today announced that it has fined the former Ferris, Baker Watts LLC, acquired by RBC Wealth Management, $500,000 for inadequate supervision of sales of reverse convertible notes
to retail customers as well as unsuitable sales of reverse convertibles to 57 accounts held by elderly customers who were at least 85 years old and customers with a modest net worth.
WASHINGTON -- The Financial Industry Regulatory Authority (FINRA) today announced its first enforcement action involving the sales of reverse convertible notes
(RCNs) - fining H&R Block Financial Advisors, Inc.
70% reverse convertible notes
series 26 due July 12, 2001, linked to the ordinary shares of Canon Inc.