June 4, 2013 / 5:41 AM / 4 years ago

UBS unit to pay $5.3 mln to settle SEC charge

June 4 (Reuters) - A UBS AG hedge fund agreed to pay a fine of $5.3 million to settle a charge that one of its units bought stocks in public offerings that an affiliated unit was shorting, the U.S. securities regulator said on Monday.

The U.S. Securities and Exchange Commission (SEC) said UBS AG’s $6 billion hedge fund, UBS O‘Connor LLC, violated a rule governing short sales 16 times between January 2009 and March 2011.

The rule prevents an entity from buying stocks in a public offering if it has shorted those same stocks.

“The settlement pertains to certain transactions for which O‘Connor believed that an exception to an SEC rule applied,” UBS spokeswoman Karina Byrne told Reuters.

Byrne said the firm determined that settling the matter “without admitting or denying liability was the best and most expedient way forward”.

The settlement does not affect UBS O‘Connor’s funds or their investors, she added.

The SEC said on its website that UBS O‘Connor had the “mistaken belief” that each of its units qualified for the rule’s “separate accounts” exception.

The exception allows a person or an entity to buy stocks from a public offering in an account when a short sale has been made in another account, provided that trading decisions for each account are made separately.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below