Ex-UBS Financial broker settles hedge fund case-SEC

WASHINGTON, Jan 14 (Reuters) - A former broker at UBS Financial Services Inc has agreed to settle charges he participated in a multimillion dollar hedge fund fraud, the U.S. Securities and Exchange Commission said on Monday.

The SEC said Justin Paperny, 36, agreed to pay disgorgement and a civil penalty in amounts that are not yet determined.

An attorney for Paperny did not immediately return a call seeking comment. Paperny settled the case without admitting or denying the charges.

The SEC said Paperny served as a broker for the hedge fund GLT Venture Fund LP, which raised $14.1 million from 42 investors.

It said Paperny from 2002 through 2004 participated in the fraudulent offering of limited partnership interests in the hedge fund, telling investors that GLT had access to hot initial public offerings and achieved high yearly returns.

GLT in fact did not have access to highly sought after IPOs and suffered "substantial losses" because of the hedge fund manager's poor trading, the SEC said.

The agency said Paperny received about $220,000 in commissions and other payments from the hedge fund manager. (Reporting by Karey Wutkowski;Editing by Andre Grenon)