The fine comes as FINRA says UBS-FS failed to establish and maintain a supervisory system to oversee the short-term trading of syndicate preferred stocks.

Between January 2017 and December 2018, UBS-FS representatives are said to have recommended short-term trades in syndicate preferred stocks to retail customers. 

According to the regulator, this resulted in financial losses for customers while generating commissions and concessions for the firm and its representatives.

They add that the actions breached FINRA Rules 3110 and 2010, which require firms to supervise their representatives and ensure adherence to ethical trading standards.

During the period in question, UBS-FS is said to have earned over $2.6 million in sales concessions and at least $343,914 in sales commissions from these trades. 

FINRA highlighted that the firm’s inadequate supervisory system failed to flag or address these unsuitable recommendations effectively.

In addition to the fine, UBS-FS has agreed to pay $343,914 in restitution to affected customers and to disgorge the $2.6 million in sales concessions. 

By January 2023, UBS-FS implemented revised written procedures and an enhanced trade review system to address the shortcomings.

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